Correlation Between Bk Harda and Bank Maspion

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

Diversification Opportunities for Bk Harda and Bank Maspion

0.8

Correlation Coefficient

Bk Harda  Bank Maspion

Very poor diversification

The 3 months correlation between BBHI and Bank is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Bk Harda Internasional and Bank Maspion Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Maspion Indonesia 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 Maspion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Maspion Indonesia has no effect on the direction of Bk Harda i.e., Bk Harda and Bank Maspion go up and down completely randomly.

Pair Corralation between Bk Harda and Bank Maspion

Assuming the 90 days trading horizon Bk Harda Internasional is expected to generate 3.93 times more return on investment than Bank Maspion. However, Bk Harda is 3.93 times more volatile than Bank Maspion Indonesia. It trades about 0.02 of its potential returns per unit of risk. Bank Maspion Indonesia is currently generating about -0.27 per unit of risk. If you would invest  70,000  in Bk Harda Internasional on December 29, 2024 and sell it today you would lose (3,000) from holding Bk Harda Internasional or give up 4.29% of portfolio value over 90 days.

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

Bk Harda Internasional  vs.  Bank Maspion Indonesia

Bk Harda Internasional

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bk Harda Internasional are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Bk Harda is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Bank Maspion Indonesia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bank Maspion 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 Bk Harda and Bank Maspion

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

The idea behind Bk Harda Internasional and Bank Maspion 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.