Correlation Between Bank Negara and B Riley
Can any of the company-specific risk be diversified away by investing in both Bank Negara and B Riley 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 B Riley 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 B Riley Financial, you can compare the effects of market volatilities on Bank Negara and B Riley 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 B Riley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Negara and B Riley.
Diversification Opportunities for Bank Negara and B Riley
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and RILYO is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Bank Negara Indonesia and B Riley Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B Riley Financial 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 B Riley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B Riley Financial has no effect on the direction of Bank Negara i.e., Bank Negara and B Riley go up and down completely randomly.
Pair Corralation between Bank Negara and B Riley
If you would invest 2,445 in B Riley Financial on August 28, 2024 and sell it today you would earn a total of 0.00 from holding B Riley Financial or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Bank Negara Indonesia vs. B Riley Financial
Performance |
| Timeline |
| Bank Negara Indonesia |
| B Riley Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank Negara and B Riley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Negara and B Riley
The main advantage of trading using opposite Bank Negara and B Riley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Negara position performs unexpectedly, B Riley 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 B Riley will offset losses from the drop in B Riley's long position.The idea behind Bank Negara Indonesia and B Riley Financial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| B Riley vs. B Riley Financial | B Riley vs. B Riley Financial | B Riley vs. B Riley Financial, | B Riley vs. B Riley Financial |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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