Correlation Between PT UBC and Bank Nationalnobu

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

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

Diversification Opportunities for PT UBC and Bank Nationalnobu

-0.4

Correlation Coefficient

PT UBC  Bank Nationalnobu

Very good diversification

The 3 months correlation between LABS and Bank is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding PT UBC Medical and Bank Nationalnobu Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Nationalnobu Tbk and PT UBC 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 PT UBC Medical are associated (or correlated) with Bank Nationalnobu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Nationalnobu Tbk has no effect on the direction of PT UBC i.e., PT UBC and Bank Nationalnobu go up and down completely randomly.

Pair Corralation between PT UBC and Bank Nationalnobu

Assuming the 90 days trading horizon PT UBC Medical is expected to under-perform the Bank Nationalnobu. But the stock apears to be less risky and, when comparing its historical volatility, PT UBC Medical is 3.48 times less risky than Bank Nationalnobu. The stock trades about -0.15 of its potential returns per unit of risk. The Bank Nationalnobu Tbk is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  57,500  in Bank Nationalnobu Tbk on December 28, 2024 and sell it today you would earn a total of  5,500  from holding Bank Nationalnobu Tbk or generate 9.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

PT UBC Medical  vs.  Bank Nationalnobu Tbk

PT UBC Medical

Risk-Adjusted Performance

Very Weak

Over the last 90 days PT UBC Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak 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 Nationalnobu Tbk

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bank Nationalnobu Tbk are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Bank Nationalnobu disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT UBC and Bank Nationalnobu

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

The idea behind PT UBC Medical and Bank Nationalnobu 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.