Correlation Between Bank Yudha and Bank Ganesha

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

Diversification Opportunities for Bank Yudha and Bank Ganesha

0.42

Correlation Coefficient

Bank Yudha  Bank Ganesha

Very weak diversification

The 3 months correlation between Bank and Bank is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Bank Yudha Bhakti and Bank Ganesha Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Ganesha 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 Ganesha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Ganesha Tbk has no effect on the direction of Bank Yudha i.e., Bank Yudha and Bank Ganesha go up and down completely randomly.

Pair Corralation between Bank Yudha and Bank Ganesha

Assuming the 90 days trading horizon Bank Yudha Bhakti is expected to under-perform the Bank Ganesha. In addition to that, Bank Yudha is 1.1 times more volatile than Bank Ganesha Tbk. It trades about -0.07 of its total potential returns per unit of risk. Bank Ganesha Tbk is currently generating about 0.02 per unit of volatility. If you would invest  7,600  in Bank Ganesha Tbk on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Bank Ganesha Tbk or generate 1.32% return on investment over 90 days.

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

Bank Yudha Bhakti  vs.  Bank Ganesha Tbk

Bank Yudha Bhakti

Risk-Adjusted Performance

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 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.

Bank Ganesha Tbk

Risk-Adjusted Performance

Weak

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

Pair Trading with Bank Yudha and Bank Ganesha

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

The idea behind Bank Yudha Bhakti and Bank Ganesha 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.