Correlation Between Bank Mega and Sinar Mas
Can any of the company-specific risk be diversified away by investing in both Bank Mega and Sinar Mas 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 Mega and Sinar Mas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Mega Tbk and Sinar Mas Multiartha, you can compare the effects of market volatilities on Bank Mega and Sinar Mas 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 Mega with a short position of Sinar Mas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mega and Sinar Mas.
Diversification Opportunities for Bank Mega and Sinar Mas
Excellent diversification
The 3 months correlation between Bank and Sinar is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mega Tbk and Sinar Mas Multiartha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinar Mas Multiartha and Bank Mega 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 Mega Tbk are associated (or correlated) with Sinar Mas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinar Mas Multiartha has no effect on the direction of Bank Mega i.e., Bank Mega and Sinar Mas go up and down completely randomly.
Pair Corralation between Bank Mega and Sinar Mas
Assuming the 90 days trading horizon Bank Mega Tbk is expected to under-perform the Sinar Mas. In addition to that, Bank Mega is 1.78 times more volatile than Sinar Mas Multiartha. It trades about -0.25 of its total potential returns per unit of risk. Sinar Mas Multiartha is currently generating about 0.09 per unit of volatility. If you would invest 1,460,000 in Sinar Mas Multiartha on December 1, 2024 and sell it today you would earn a total of 85,000 from holding Sinar Mas Multiartha or generate 5.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Bank Mega Tbk vs. Sinar Mas Multiartha
Performance |
Timeline |
Bank Mega Tbk |
Sinar Mas Multiartha |
Bank Mega and Sinar Mas Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank Mega and Sinar Mas
The main advantage of trading using opposite Bank Mega and Sinar Mas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mega position performs unexpectedly, Sinar Mas 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 Sinar Mas will offset losses from the drop in Sinar Mas' long position.Bank Mega vs. Bank Ocbc Nisp | Bank Mega vs. Bank Mayapada Internasional | Bank Mega vs. Bank Permata Tbk | Bank Mega vs. Bank Pan Indonesia |
Sinar Mas vs. Bank Mega Tbk | Sinar Mas vs. Trimegah Securities Tbk | Sinar Mas vs. Paninvest Tbk | Sinar Mas vs. Sinar Mas Agro |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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