Correlation Between Sido Muncul and Bank BRISyariah
Can any of the company-specific risk be diversified away by investing in both Sido Muncul and Bank BRISyariah 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 Sido Muncul and Bank BRISyariah into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sido Muncul PT and Bank BRISyariah Tbk, you can compare the effects of market volatilities on Sido Muncul and Bank BRISyariah 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 Sido Muncul with a short position of Bank BRISyariah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sido Muncul and Bank BRISyariah.
Diversification Opportunities for Sido Muncul and Bank BRISyariah
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sido and Bank is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Sido Muncul PT and Bank BRISyariah Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank BRISyariah Tbk and Sido Muncul 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 Sido Muncul PT are associated (or correlated) with Bank BRISyariah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank BRISyariah Tbk has no effect on the direction of Sido Muncul i.e., Sido Muncul and Bank BRISyariah go up and down completely randomly.
Pair Corralation between Sido Muncul and Bank BRISyariah
Assuming the 90 days trading horizon Sido Muncul PT is expected to generate 0.65 times more return on investment than Bank BRISyariah. However, Sido Muncul PT is 1.55 times less risky than Bank BRISyariah. It trades about -0.05 of its potential returns per unit of risk. Bank BRISyariah Tbk is currently generating about -0.04 per unit of risk. If you would invest 59,185 in Sido Muncul PT on August 28, 2024 and sell it today you would lose (1,185) from holding Sido Muncul PT or give up 2.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sido Muncul PT vs. Bank BRISyariah Tbk
Performance |
| Timeline |
| Sido Muncul PT |
| Bank BRISyariah Tbk |
Sido Muncul and Bank BRISyariah Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sido Muncul and Bank BRISyariah
The main advantage of trading using opposite Sido Muncul and Bank BRISyariah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sido Muncul position performs unexpectedly, Bank BRISyariah 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 Bank BRISyariah will offset losses from the drop in Bank BRISyariah's long position.The idea behind Sido Muncul PT and Bank BRISyariah Tbk 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.| Bank BRISyariah vs. Aneka Tambang Persero | Bank BRISyariah vs. Sido Muncul PT | Bank BRISyariah vs. Indofood Cbp Sukses | Bank BRISyariah vs. Bank Tabungan Pensiunan |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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