Correlation Between Bank Negara and Morphic Holding
Can any of the company-specific risk be diversified away by investing in both Bank Negara and Morphic Holding 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 Morphic Holding 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 Morphic Holding, you can compare the effects of market volatilities on Bank Negara and Morphic Holding 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 Morphic Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Negara and Morphic Holding.
Diversification Opportunities for Bank Negara and Morphic Holding
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Morphic is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Bank Negara Indonesia and Morphic Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morphic Holding 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 Morphic Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morphic Holding has no effect on the direction of Bank Negara i.e., Bank Negara and Morphic Holding go up and down completely randomly.
Pair Corralation between Bank Negara and Morphic Holding
Assuming the 90 days horizon Bank Negara Indonesia is expected to generate 0.75 times more return on investment than Morphic Holding. However, Bank Negara Indonesia is 1.34 times less risky than Morphic Holding. It trades about 0.03 of its potential returns per unit of risk. Morphic Holding is currently generating about 0.01 per unit of risk. If you would invest 1,526 in Bank Negara Indonesia on September 14, 2024 and sell it today you would lose (65.00) from holding Bank Negara Indonesia or give up 4.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 69.78% |
| Values | Daily Returns |
Bank Negara Indonesia vs. Morphic Holding
Performance |
| Timeline |
| Bank Negara Indonesia |
| Morphic Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank Negara and Morphic Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Negara and Morphic Holding
The main advantage of trading using opposite Bank Negara and Morphic Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Negara position performs unexpectedly, Morphic Holding 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 Morphic Holding will offset losses from the drop in Morphic Holding'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 |
| Morphic Holding vs. Arcellx | Morphic Holding vs. Ventyx Biosciences | Morphic Holding vs. Immunocore Holdings | Morphic Holding vs. Vaxcyte |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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