Correlation Between Bank Negara and Industrial Tech

Can any of the company-specific risk be diversified away by investing in both Bank Negara and Industrial Tech 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 Industrial Tech 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 Industrial Tech Acquisitions, you can compare the effects of market volatilities on Bank Negara and Industrial Tech 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 Industrial Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Negara and Industrial Tech.

Diversification Opportunities for Bank Negara and Industrial Tech

0.0

Correlation Coefficient

Bank Negara  Industrial Tech

Pay attention - limited upside

The 3 months correlation between Bank and Industrial is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bank Negara Indonesia and Industrial Tech Acquisitions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Tech Acqu 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 Industrial Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial Tech Acqu has no effect on the direction of Bank Negara i.e., Bank Negara and Industrial Tech go up and down completely randomly.

Pair Corralation between Bank Negara and Industrial Tech

If you would invest  1,468  in Bank Negara Indonesia on December 2, 2024 and sell it today you would lose (226.00) from holding Bank Negara Indonesia or give up 15.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Bank Negara Indonesia  vs.  Industrial Tech Acquisitions

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 latest unsteady performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Industrial Tech Acqu

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Bank Negara and Industrial Tech

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

The idea behind Bank Negara Indonesia and Industrial Tech Acquisitions 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.

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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.