Correlation Between Bank Central and Cibl

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Bank Central and Cibl 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 Central and Cibl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Central Asia and Cibl Inc, you can compare the effects of market volatilities on Bank Central and Cibl 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 Central with a short position of Cibl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Central and Cibl.

Diversification Opportunities for Bank Central and Cibl

-0.5
  Correlation Coefficient

Very good diversification

The 3 months correlation between Bank and Cibl is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia and Cibl Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cibl Inc and Bank Central 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 Central Asia are associated (or correlated) with Cibl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cibl Inc has no effect on the direction of Bank Central i.e., Bank Central and Cibl go up and down completely randomly.

Pair Corralation between Bank Central and Cibl

Assuming the 90 days horizon Bank Central Asia is expected to under-perform the Cibl. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Central Asia is 1.23 times less risky than Cibl. The pink sheet trades about -0.03 of its potential returns per unit of risk. The Cibl Inc is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  180,000  in Cibl Inc on September 13, 2024 and sell it today you would lose (5,025) from holding Cibl Inc or give up 2.79% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Bank Central Asia  vs.  Cibl Inc

 Performance 
       Timeline  
Bank Central Asia 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Bank Central Asia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Bank Central is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Cibl Inc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Cibl Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental drivers, Cibl is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Bank Central and Cibl Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bank Central and Cibl

The main advantage of trading using opposite Bank Central and Cibl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Central position performs unexpectedly, Cibl 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 Cibl will offset losses from the drop in Cibl's long position.
The idea behind Bank Central Asia and Cibl Inc 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.
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

Other Complementary Tools

ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
Fundamental Analysis
View fundamental data based on most recent published financial statements
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Portfolio Analyzer
Portfolio analysis module that provides access to portfolio diagnostics and optimization engine