Correlation Between Akr Corporindo and Bank Negara

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

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

Diversification Opportunities for Akr Corporindo and Bank Negara

0.58

Correlation Coefficient

Akr Corporindo  Bank Negara

Very weak diversification

The 3 months correlation between Akr and Bank is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Akr Corporindo Tbk and Bank Negara Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Negara Indonesia and Akr Corporindo 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 Akr Corporindo Tbk are associated (or correlated) with Bank Negara. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Negara Indonesia has no effect on the direction of Akr Corporindo i.e., Akr Corporindo and Bank Negara go up and down completely randomly.

Pair Corralation between Akr Corporindo and Bank Negara

Assuming the 90 days trading horizon Akr Corporindo Tbk is expected to generate 1.14 times more return on investment than Bank Negara. However, Akr Corporindo is 1.14 times more volatile than Bank Negara Indonesia. It trades about 0.02 of its potential returns per unit of risk. Bank Negara Indonesia is currently generating about 0.01 per unit of risk. If you would invest  119,243  in Akr Corporindo Tbk on December 2, 2024 and sell it today you would earn a total of  7,757  from holding Akr Corporindo Tbk or generate 6.51% return on investment over 90 days.

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

Akr Corporindo Tbk  vs.  Bank Negara Indonesia

Akr Corporindo Tbk

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Akr Corporindo Tbk are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Akr Corporindo may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Bank Negara Indonesia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bank Negara 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 April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Akr Corporindo and Bank Negara

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

The idea behind Akr Corporindo Tbk and Bank Negara 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.