Correlation Between Bank Central and Pelayaran Kurnia

Can any of the company-specific risk be diversified away by investing in both Bank Central and Pelayaran Kurnia 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 Pelayaran Kurnia 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 Pelayaran Kurnia Lautan, you can compare the effects of market volatilities on Bank Central and Pelayaran Kurnia 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 Pelayaran Kurnia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Central and Pelayaran Kurnia.

Diversification Opportunities for Bank Central and Pelayaran Kurnia

0.09

Correlation Coefficient

Bank Central  Pelayaran Kurnia

Significant diversification

The 3 months correlation between Bank and Pelayaran is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia and Pelayaran Kurnia Lautan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pelayaran Kurnia Lautan 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 Pelayaran Kurnia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pelayaran Kurnia Lautan has no effect on the direction of Bank Central i.e., Bank Central and Pelayaran Kurnia go up and down completely randomly.

Pair Corralation between Bank Central and Pelayaran Kurnia

Assuming the 90 days trading horizon Bank Central Asia is expected to generate 0.3 times more return on investment than Pelayaran Kurnia. However, Bank Central Asia is 3.36 times less risky than Pelayaran Kurnia. It trades about -0.07 of its potential returns per unit of risk. Pelayaran Kurnia Lautan is currently generating about -0.31 per unit of risk. If you would invest  1,000,000  in Bank Central Asia on September 27, 2024 and sell it today you would lose (25,000) from holding Bank Central Asia or give up 2.5% of portfolio value over 90 days.

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

Bank Central Asia  vs.  Pelayaran Kurnia Lautan

Bank Central Asia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bank Central Asia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pelayaran Kurnia Lautan

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pelayaran Kurnia Lautan has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Bank Central and Pelayaran Kurnia

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

The idea behind Bank Central Asia and Pelayaran Kurnia Lautan 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.