Correlation Between Bank Qnb and Bank Maspion

Can any of the company-specific risk be diversified away by investing in both Bank Qnb and Bank Maspion 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 Qnb and Bank Maspion into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bank Qnb Indonesia and Bank Maspion Indonesia, you can compare the effects of market volatilities on Bank Qnb and Bank Maspion 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 Qnb with a short position of Bank Maspion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Qnb and Bank Maspion.

Diversification Opportunities for Bank Qnb and Bank Maspion

-0.43

Correlation Coefficient

Bank Qnb  Bank Maspion

Very good diversification

The 3 months correlation between Bank and Bank is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Bank Qnb Indonesia and Bank Maspion Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Maspion Indonesia and Bank Qnb 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 Qnb Indonesia are associated (or correlated) with Bank Maspion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Maspion Indonesia has no effect on the direction of Bank Qnb i.e., Bank Qnb and Bank Maspion go up and down completely randomly.

Pair Corralation between Bank Qnb and Bank Maspion

Assuming the 90 days trading horizon Bank Qnb Indonesia is expected to generate 2.19 times more return on investment than Bank Maspion. However, Bank Qnb is 2.19 times more volatile than Bank Maspion Indonesia. It trades about 0.07 of its potential returns per unit of risk. Bank Maspion Indonesia is currently generating about -0.22 per unit of risk. If you would invest  6,200  in Bank Qnb Indonesia on September 18, 2024 and sell it today you would earn a total of  1,200  from holding Bank Qnb Indonesia or generate 19.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Bank Qnb Indonesia  vs.  Bank Maspion Indonesia

Bank Qnb Indonesia

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bank Qnb Indonesia are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Bank Qnb disclosed solid returns over the last few months and may actually be approaching a breakup point.

Bank Maspion Indonesia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bank Maspion Indonesia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Bank Qnb and Bank Maspion

The main advantage of trading using opposite Bank Qnb and Bank Maspion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Qnb position performs unexpectedly, Bank Maspion 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 Maspion will offset losses from the drop in Bank Maspion's long position.

The idea behind Bank Qnb Indonesia and Bank Maspion Indonesia 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.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.