Correlation Between Bank Dinar and Bank Agris

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

Diversification Opportunities for Bank Dinar and Bank Agris

0.41

Correlation Coefficient

Bank Dinar  Bank Agris

Very weak diversification

The 3 months correlation between Bank and Bank is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Bank Dinar Indonesia 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 Dinar 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 Dinar Indonesia 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 Dinar i.e., Bank Dinar and Bank Agris go up and down completely randomly.

Pair Corralation between Bank Dinar and Bank Agris

Assuming the 90 days trading horizon Bank Dinar Indonesia is expected to under-perform the Bank Agris. In addition to that, Bank Dinar is 2.09 times more volatile than Bank Agris Tbk. It trades about -0.15 of its total potential returns per unit of risk. Bank Agris Tbk is currently generating about -0.03 per unit of volatility. If you would invest  7,700  in Bank Agris Tbk on October 8, 2024 and sell it today you would lose (300.00) from holding Bank Agris Tbk or give up 3.9% of portfolio value over 90 days.

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

Bank Dinar Indonesia  vs.  Bank Agris Tbk

Bank Dinar Indonesia

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bank Dinar Indonesia are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Bank Dinar disclosed solid returns over the last few months and may actually be approaching a breakup point.

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 disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bank Dinar and Bank Agris

The main advantage of trading using opposite Bank Dinar and Bank Agris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Dinar 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 Dinar Indonesia 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.