Correlation Between Salim Ivomas and Bank BRISyariah

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

By analyzing existing cross correlation between Salim Ivomas Pratama and Bank BRISyariah Tbk, you can compare the effects of market volatilities on Salim Ivomas and Bank BRISyariah 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 Salim Ivomas with a short position of Bank BRISyariah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salim Ivomas and Bank BRISyariah.

Diversification Opportunities for Salim Ivomas and Bank BRISyariah

-0.37

Correlation Coefficient

Salim Ivomas  Bank BRISyariah

Very good diversification

The 3 months correlation between Salim and Bank is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Salim Ivomas Pratama and Bank BRISyariah Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank BRISyariah Tbk and Salim Ivomas 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 Salim Ivomas Pratama are associated (or correlated) with Bank BRISyariah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank BRISyariah Tbk has no effect on the direction of Salim Ivomas i.e., Salim Ivomas and Bank BRISyariah go up and down completely randomly.

Pair Corralation between Salim Ivomas and Bank BRISyariah

Assuming the 90 days trading horizon Salim Ivomas Pratama is expected to generate 0.58 times more return on investment than Bank BRISyariah. However, Salim Ivomas Pratama is 1.71 times less risky than Bank BRISyariah. It trades about 0.03 of its potential returns per unit of risk. Bank BRISyariah Tbk is currently generating about -0.06 per unit of risk. If you would invest  37,800  in Salim Ivomas Pratama on December 30, 2024 and sell it today you would earn a total of  800.00  from holding Salim Ivomas Pratama or generate 2.12% return on investment over 90 days.

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

Salim Ivomas Pratama  vs.  Bank BRISyariah Tbk

Salim Ivomas Pratama

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Salim Ivomas Pratama are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Salim Ivomas is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Bank BRISyariah Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bank BRISyariah Tbk 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 Salim Ivomas and Bank BRISyariah

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

The idea behind Salim Ivomas Pratama and Bank BRISyariah Tbk 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.