Correlation Between Bank Negara and Lexaria Bioscience
Can any of the company-specific risk be diversified away by investing in both Bank Negara and Lexaria Bioscience at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Bank Negara and Lexaria Bioscience into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Negara Indonesia and Lexaria Bioscience Corp, you can compare the effects of market volatilities on Bank Negara and Lexaria Bioscience and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Bank Negara with a short position of Lexaria Bioscience. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Negara and Lexaria Bioscience.
Diversification Opportunities for Bank Negara and Lexaria Bioscience
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and Lexaria is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Bank Negara Indonesia and Lexaria Bioscience Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lexaria Bioscience Corp and Bank Negara is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Bank Negara Indonesia are associated (or correlated) with Lexaria Bioscience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lexaria Bioscience Corp has no effect on the direction of Bank Negara i.e., Bank Negara and Lexaria Bioscience go up and down completely randomly.
Pair Corralation between Bank Negara and Lexaria Bioscience
Assuming the 90 days horizon Bank Negara Indonesia is expected to generate 1.45 times more return on investment than Lexaria Bioscience. However, Bank Negara is 1.45 times more volatile than Lexaria Bioscience Corp. It trades about 0.0 of its potential returns per unit of risk. Lexaria Bioscience Corp is currently generating about -0.29 per unit of risk. If you would invest 1,487 in Bank Negara Indonesia on November 4, 2024 and sell it today you would lose (42.00) from holding Bank Negara Indonesia or give up 2.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Negara Indonesia vs. Lexaria Bioscience Corp
Performance |
| Timeline |
| Bank Negara Indonesia |
| Lexaria Bioscience Corp |
Bank Negara and Lexaria Bioscience Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Negara and Lexaria Bioscience
The main advantage of trading using opposite Bank Negara and Lexaria Bioscience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Negara position performs unexpectedly, Lexaria Bioscience can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Lexaria Bioscience will offset losses from the drop in Lexaria Bioscience's long position.| Bank Negara vs. Banco Bradesco SA | Bank Negara vs. Itau Unibanco Banco | Bank Negara vs. Lloyds Banking Group | Bank Negara vs. Deutsche Bank AG |
| Lexaria Bioscience vs. Revelation Biosciences | Lexaria Bioscience vs. Zura Bio Limited | Lexaria Bioscience vs. Phio Pharmaceuticals Corp | Lexaria Bioscience vs. ZyVersa Therapeutics |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Valuation module to check real value of public entities based on technical and fundamental data.
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