Correlation Between Bank Negara and Seelos Therapeutics

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

Diversification Opportunities for Bank Negara and Seelos Therapeutics

0.0

Correlation Coefficient

Bank Negara  Seelos Therapeutics

Pay attention - limited upside

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

Pair Corralation between Bank Negara and Seelos Therapeutics

If you would invest  1,302  in Bank Negara Indonesia on December 27, 2024 and sell it today you would lose (42.00) from holding Bank Negara Indonesia or give up 3.23% 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.  Seelos Therapeutics

Bank Negara Indonesia

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bank Negara Indonesia are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Bank Negara may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Seelos Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Seelos Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Seelos Therapeutics is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Bank Negara and Seelos Therapeutics

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

The idea behind Bank Negara Indonesia and Seelos Therapeutics 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.