Correlation Between Bank Negara and Gncc Capital

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

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

Diversification Opportunities for Bank Negara and Gncc Capital

0.12

Correlation Coefficient

Bank Negara  Gncc Capital

Average diversification

The 3 months correlation between Bank and Gncc is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Bank Negara Indonesia and Gncc Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gncc Capital and Bank Negara 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 Negara Indonesia are associated (or correlated) with Gncc Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gncc Capital has no effect on the direction of Bank Negara i.e., Bank Negara and Gncc Capital go up and down completely randomly.

Pair Corralation between Bank Negara and Gncc Capital

If you would invest  1,302  in Bank Negara Indonesia on December 27, 2024 and sell it today you would lose (94.00) from holding Bank Negara Indonesia or give up 7.22% of portfolio value over 90 days.

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

Bank Negara Indonesia  vs.  Gncc Capital

Bank Negara Indonesia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bank Negara Indonesia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Bank Negara is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Gncc Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gncc Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Gncc Capital is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Bank Negara and Gncc Capital

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

The idea behind Bank Negara Indonesia and Gncc Capital 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..