Correlation Between Bank Negara and Singaraja Putra
Can any of the company-specific risk be diversified away by investing in both Bank Negara and Singaraja Putra 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 Singaraja Putra 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 Singaraja Putra, you can compare the effects of market volatilities on Bank Negara and Singaraja Putra 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 Singaraja Putra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Negara and Singaraja Putra.
Diversification Opportunities for Bank Negara and Singaraja Putra
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Singaraja is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Bank Negara Indonesia and Singaraja Putra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singaraja Putra 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 Singaraja Putra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singaraja Putra has no effect on the direction of Bank Negara i.e., Bank Negara and Singaraja Putra go up and down completely randomly.
Pair Corralation between Bank Negara and Singaraja Putra
Assuming the 90 days trading horizon Bank Negara is expected to generate 3.15 times less return on investment than Singaraja Putra. In addition to that, Bank Negara is 1.02 times more volatile than Singaraja Putra. It trades about 0.02 of its total potential returns per unit of risk. Singaraja Putra is currently generating about 0.08 per unit of volatility. If you would invest 134,000 in Singaraja Putra on September 21, 2024 and sell it today you would earn a total of 350,000 from holding Singaraja Putra or generate 261.19% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 99.79% |
Values | Daily Returns |
Bank Negara Indonesia vs. Singaraja Putra
Performance |
Timeline |
Bank Negara Indonesia |
Singaraja Putra |
Bank Negara and Singaraja Putra Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank Negara and Singaraja Putra
The main advantage of trading using opposite Bank Negara and Singaraja Putra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Negara position performs unexpectedly, Singaraja Putra 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 Singaraja Putra will offset losses from the drop in Singaraja Putra's long position.Bank Negara vs. Bank Mandiri Persero | ||
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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