Correlation Between M Cash and Bank Artos

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

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

Diversification Opportunities for M Cash and Bank Artos

-0.87

Correlation Coefficient

M Cash  Bank Artos

Pay attention - limited upside

The 3 months correlation between MCAS and Bank is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding M Cash Integrasi 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 M Cash 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 M Cash Integrasi 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 M Cash i.e., M Cash and Bank Artos go up and down completely randomly.

Pair Corralation between M Cash and Bank Artos

Assuming the 90 days trading horizon M Cash Integrasi is expected to generate 1.21 times more return on investment than Bank Artos. However, M Cash is 1.21 times more volatile than Bank Artos Indonesia. It trades about 0.22 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  113,000  in M Cash Integrasi on December 29, 2024 and sell it today you would earn a total of  62,500  from holding M Cash Integrasi or generate 55.31% return on investment over 90 days.

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

M Cash Integrasi  vs.  Bank Artos Indonesia

M Cash Integrasi

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in M Cash Integrasi are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, M Cash disclosed solid returns over the last few months and may actually be approaching a breakup point.

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 M Cash and Bank Artos

The main advantage of trading using opposite M Cash and Bank Artos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if M Cash 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 M Cash Integrasi 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.