Correlation Between Bank Negara and CF Acquisition

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Bank Negara and CF Acquisition 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 CF Acquisition 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 CF Acquisition IV, you can compare the effects of market volatilities on Bank Negara and CF Acquisition 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 CF Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Negara and CF Acquisition.

Diversification Opportunities for Bank Negara and CF Acquisition

-0.62
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Bank and CFIV is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Bank Negara Indonesia and CF Acquisition IV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CF Acquisition IV 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 CF Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CF Acquisition IV has no effect on the direction of Bank Negara i.e., Bank Negara and CF Acquisition go up and down completely randomly.

Pair Corralation between Bank Negara and CF Acquisition

If you would invest  1,052  in CF Acquisition IV on September 17, 2024 and sell it today you would earn a total of  0.00  from holding CF Acquisition IV or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy1.56%
ValuesDaily Returns

Bank Negara Indonesia  vs.  CF Acquisition IV

 Performance 
       Timeline  
Bank Negara Indonesia 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Bank Negara Indonesia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
CF Acquisition IV 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days CF Acquisition IV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable forward indicators, CF Acquisition is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Bank Negara and CF Acquisition Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bank Negara and CF Acquisition

The main advantage of trading using opposite Bank Negara and CF Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Negara position performs unexpectedly, CF Acquisition 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 CF Acquisition will offset losses from the drop in CF Acquisition's long position.
The idea behind Bank Negara Indonesia and CF Acquisition IV 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.

Other Complementary Tools

Sectors
List of equity sectors categorizing publicly traded companies based on their primary business activities
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Price Transformation
Use Price Transformation models to analyze the depth of different equity instruments across global markets