Correlation Between Bk Harda and Bank Agris

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

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

Diversification Opportunities for Bk Harda and Bank Agris

0.14

Correlation Coefficient

Bk Harda  Bank Agris

Average diversification

The 3 months correlation between BBHI and Bank is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Bk Harda Internasional and Bank Agris Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Agris Tbk and Bk Harda 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 Bk Harda Internasional are associated (or correlated) with Bank Agris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Agris Tbk has no effect on the direction of Bk Harda i.e., Bk Harda and Bank Agris go up and down completely randomly.

Pair Corralation between Bk Harda and Bank Agris

Assuming the 90 days trading horizon Bk Harda Internasional is expected to under-perform the Bank Agris. But the stock apears to be less risky and, when comparing its historical volatility, Bk Harda Internasional is 2.21 times less risky than Bank Agris. The stock trades about -0.08 of its potential returns per unit of risk. The Bank Agris Tbk is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  7,800  in Bank Agris Tbk on September 3, 2024 and sell it today you would earn a total of  0.00  from holding Bank Agris Tbk or generate 0.0% return on investment over 90 days.

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

Bk Harda Internasional  vs.  Bank Agris Tbk

Bk Harda Internasional

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bk Harda Internasional 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.

Bank Agris Tbk

Risk-Adjusted Performance

2 of 100

Weak

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

Pair Trading with Bk Harda and Bank Agris

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

The idea behind Bk Harda Internasional and Bank Agris Tbk 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..