Correlation Between Adira Dinamika and BFI Finance
Can any of the company-specific risk be diversified away by investing in both Adira Dinamika and BFI Finance 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 Adira Dinamika and BFI Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adira Dinamika Multi and BFI Finance Indonesia, you can compare the effects of market volatilities on Adira Dinamika and BFI Finance 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 Adira Dinamika with a short position of BFI Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adira Dinamika and BFI Finance.
Diversification Opportunities for Adira Dinamika and BFI Finance
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Adira and BFI is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Adira Dinamika Multi and BFI Finance Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BFI Finance Indonesia and Adira Dinamika 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 Adira Dinamika Multi are associated (or correlated) with BFI Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BFI Finance Indonesia has no effect on the direction of Adira Dinamika i.e., Adira Dinamika and BFI Finance go up and down completely randomly.
Pair Corralation between Adira Dinamika and BFI Finance
Assuming the 90 days trading horizon Adira Dinamika Multi is expected to under-perform the BFI Finance. But the stock apears to be less risky and, when comparing its historical volatility, Adira Dinamika Multi is 2.65 times less risky than BFI Finance. The stock trades about -0.23 of its potential returns per unit of risk. The BFI Finance Indonesia is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 94,596 in BFI Finance Indonesia on October 25, 2024 and sell it today you would lose (5,596) from holding BFI Finance Indonesia or give up 5.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.33% |
| Values | Daily Returns |
Adira Dinamika Multi vs. BFI Finance Indonesia
Performance |
| Timeline |
| Adira Dinamika Multi |
| BFI Finance Indonesia |
Adira Dinamika and BFI Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adira Dinamika and BFI Finance
The main advantage of trading using opposite Adira Dinamika and BFI Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adira Dinamika position performs unexpectedly, BFI Finance 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 BFI Finance will offset losses from the drop in BFI Finance's long position.| Adira Dinamika vs. BFI Finance Indonesia | Adira Dinamika vs. Clipan Finance Indonesia | Adira Dinamika vs. Astra Otoparts Tbk | Adira Dinamika vs. Bank Danamon Indonesia |
| BFI Finance vs. Adira Dinamika Multi | BFI Finance vs. Clipan Finance Indonesia | BFI Finance vs. Sumber Alfaria Trijaya | BFI Finance vs. Bank Permata Tbk |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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