Correlation Between Vastland Indonesia and Bank Central
Can any of the company-specific risk be diversified away by investing in both Vastland Indonesia and Bank Central 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 Vastland Indonesia and Bank Central into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vastland Indonesia and Bank Central Asia, you can compare the effects of market volatilities on Vastland Indonesia and Bank Central 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 Vastland Indonesia with a short position of Bank Central. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vastland Indonesia and Bank Central.
Diversification Opportunities for Vastland Indonesia and Bank Central
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vastland and Bank is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Vastland Indonesia and Bank Central Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Central Asia and Vastland Indonesia 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 Vastland Indonesia are associated (or correlated) with Bank Central. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Central Asia has no effect on the direction of Vastland Indonesia i.e., Vastland Indonesia and Bank Central go up and down completely randomly.
Pair Corralation between Vastland Indonesia and Bank Central
Assuming the 90 days trading horizon Vastland Indonesia is expected to generate 2.0 times more return on investment than Bank Central. However, Vastland Indonesia is 2.0 times more volatile than Bank Central Asia. It trades about 0.1 of its potential returns per unit of risk. Bank Central Asia is currently generating about -0.14 per unit of risk. If you would invest 7,200 in Vastland Indonesia on August 30, 2024 and sell it today you would earn a total of 400.00 from holding Vastland Indonesia or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vastland Indonesia vs. Bank Central Asia
Performance |
| Timeline |
| Vastland Indonesia |
| Bank Central Asia |
Vastland Indonesia and Bank Central Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vastland Indonesia and Bank Central
The main advantage of trading using opposite Vastland Indonesia and Bank Central positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vastland Indonesia position performs unexpectedly, Bank Central 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 Central will offset losses from the drop in Bank Central's long position.| Vastland Indonesia vs. FKS Food Sejahtera | Vastland Indonesia vs. Anabatic Technologies Tbk | Vastland Indonesia vs. Grand Kartech Tbk | Vastland Indonesia vs. PT Hatten Bali |
| Bank Central vs. Bank Rakyat Indonesia | Bank Central vs. Bank Mandiri Persero | Bank Central vs. Bank Negara Indonesia | Bank Central vs. Astra International Tbk |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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