Correlation Between Bank Yudha and Bank Agris

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

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

Diversification Opportunities for Bank Yudha and Bank Agris

-0.01

Correlation Coefficient

Bank Yudha  Bank Agris

Good diversification

The 3 months correlation between Bank and Bank is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Bank Yudha Bhakti 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 Bank Yudha 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 Yudha Bhakti 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 Bank Yudha i.e., Bank Yudha and Bank Agris go up and down completely randomly.

Pair Corralation between Bank Yudha and Bank Agris

Assuming the 90 days trading horizon Bank Yudha Bhakti is expected to under-perform the Bank Agris. But the stock apears to be less risky and, when comparing its historical volatility, Bank Yudha Bhakti is 1.45 times less risky than Bank Agris. The stock trades about -0.04 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 Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Bank Yudha Bhakti  vs.  Bank Agris Tbk

Bank Yudha Bhakti

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bank Yudha Bhakti 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.

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 Bank Yudha and Bank Agris

The main advantage of trading using opposite Bank Yudha and Bank Agris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Yudha 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 Bank Yudha Bhakti 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.