Correlation Between Bank Victoria and Bank BRISyariah

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

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

Diversification Opportunities for Bank Victoria and Bank BRISyariah

0.0

Correlation Coefficient

Bank Victoria  Bank BRISyariah

Pay attention - limited upside

The 3 months correlation between Bank and Bank is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bank Victoria International and Bank BRISyariah Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank BRISyariah Tbk and Bank Victoria 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 Victoria International are associated (or correlated) with Bank BRISyariah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank BRISyariah Tbk has no effect on the direction of Bank Victoria i.e., Bank Victoria and Bank BRISyariah go up and down completely randomly.

Pair Corralation between Bank Victoria and Bank BRISyariah

Assuming the 90 days trading horizon Bank Victoria International is expected to generate 1.42 times more return on investment than Bank BRISyariah. However, Bank Victoria is 1.42 times more volatile than Bank BRISyariah Tbk. It trades about -0.04 of its potential returns per unit of risk. Bank BRISyariah Tbk is currently generating about -0.08 per unit of risk. If you would invest  9,100  in Bank Victoria International on December 1, 2024 and sell it today you would lose (900.00) from holding Bank Victoria International or give up 9.89% of portfolio value over 90 days.

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

Bank Victoria International  vs.  Bank BRISyariah Tbk

Bank Victoria Intern

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bank Victoria International 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 BRISyariah Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bank BRISyariah Tbk 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 Victoria and Bank BRISyariah

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

The idea behind Bank Victoria International and Bank BRISyariah 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.

Check out your portfolio center.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.