Correlation Between Bondbloxx ETF and Bank Negara

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

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

Diversification Opportunities for Bondbloxx ETF and Bank Negara

0.41

Correlation Coefficient

Bondbloxx ETF  Bank Negara

Very weak diversification

The 3 months correlation between Bondbloxx and Bank is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Bondbloxx ETF Trust and Bank Negara Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Negara Indonesia and Bondbloxx ETF 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 Bondbloxx ETF Trust are associated (or correlated) with Bank Negara. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Negara Indonesia has no effect on the direction of Bondbloxx ETF i.e., Bondbloxx ETF and Bank Negara go up and down completely randomly.

Pair Corralation between Bondbloxx ETF and Bank Negara

Given the investment horizon of 90 days Bondbloxx ETF Trust is expected to generate 0.02 times more return on investment than Bank Negara. However, Bondbloxx ETF Trust is 55.71 times less risky than Bank Negara. It trades about 0.31 of its potential returns per unit of risk. Bank Negara Indonesia is currently generating about -0.06 per unit of risk. If you would invest  4,890  in Bondbloxx ETF Trust on September 15, 2024 and sell it today you would earn a total of  25.00  from holding Bondbloxx ETF Trust or generate 0.51% return on investment over 90 days.

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

Bondbloxx ETF Trust  vs.  Bank Negara Indonesia

Bondbloxx ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bondbloxx ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Bondbloxx ETF is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Bank Negara Indonesia

Risk-Adjusted Performance

0 of 100

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 fragile 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.

Pair Trading with Bondbloxx ETF and Bank Negara

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

The idea behind Bondbloxx ETF Trust and Bank Negara Indonesia 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.