Correlation Between Alphabet and Bank Artos

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

By analyzing existing cross correlation between Alphabet Inc Class C and Bank Artos Indonesia, you can compare the effects of market volatilities on Alphabet and Bank Artos 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 Alphabet with a short position of Bank Artos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and Bank Artos.

Diversification Opportunities for Alphabet and Bank Artos

0.86

Correlation Coefficient

Alphabet  Bank Artos

Very poor diversification

The 3 months correlation between Alphabet and Bank is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C and Bank Artos Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Artos Indonesia and Alphabet 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 Alphabet Inc Class C are associated (or correlated) with Bank Artos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Artos Indonesia has no effect on the direction of Alphabet i.e., Alphabet and Bank Artos go up and down completely randomly.

Pair Corralation between Alphabet and Bank Artos

Given the investment horizon of 90 days Alphabet Inc Class C is expected to generate 0.63 times more return on investment than Bank Artos. However, Alphabet Inc Class C is 1.58 times less risky than Bank Artos. It trades about -0.12 of its potential returns per unit of risk. Bank Artos Indonesia is currently generating about -0.26 per unit of risk. If you would invest  19,247  in Alphabet Inc Class C on December 29, 2024 and sell it today you would lose (2,839) from holding Alphabet Inc Class C or give up 14.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.36%
Values	Daily Returns

Alphabet Inc Class C  vs.  Bank Artos Indonesia

Alphabet Class C

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alphabet Inc Class C 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 basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Bank Artos Indonesia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bank Artos 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 Alphabet and Bank Artos

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

The idea behind Alphabet Inc Class C and Bank Artos 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.