Correlation Between Bank Negara and PepperLime Health
Can any of the company-specific risk be diversified away by investing in both Bank Negara and PepperLime Health 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 PepperLime Health 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 PepperLime Health Acquisition, you can compare the effects of market volatilities on Bank Negara and PepperLime Health 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 PepperLime Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Negara and PepperLime Health.
Diversification Opportunities for Bank Negara and PepperLime Health
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and PepperLime is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Bank Negara Indonesia and PepperLime Health Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PepperLime Health 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 PepperLime Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PepperLime Health has no effect on the direction of Bank Negara i.e., Bank Negara and PepperLime Health go up and down completely randomly.
Pair Corralation between Bank Negara and PepperLime Health
If you would invest 1,301 in Bank Negara Indonesia on October 22, 2024 and sell it today you would earn a total of 89.00 from holding Bank Negara Indonesia or generate 6.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 5.56% |
| Values | Daily Returns |
Bank Negara Indonesia vs. PepperLime Health Acquisition
Performance |
| Timeline |
| Bank Negara Indonesia |
| PepperLime Health |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank Negara and PepperLime Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Negara and PepperLime Health
The main advantage of trading using opposite Bank Negara and PepperLime Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Negara position performs unexpectedly, PepperLime Health 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 PepperLime Health will offset losses from the drop in PepperLime Health'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 |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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