Correlation Between Buana Finance and Bank BRISyariah
Can any of the company-specific risk be diversified away by investing in both Buana Finance 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 Buana Finance and Bank BRISyariah into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Buana Finance Tbk and Bank BRISyariah Tbk, you can compare the effects of market volatilities on Buana Finance 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 Buana Finance with a short position of Bank BRISyariah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Buana Finance and Bank BRISyariah.
Diversification Opportunities for Buana Finance and Bank BRISyariah
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Buana and Bank is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Buana Finance Tbk 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 Buana Finance 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 Buana Finance Tbk 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 Buana Finance i.e., Buana Finance and Bank BRISyariah go up and down completely randomly.
Pair Corralation between Buana Finance and Bank BRISyariah
Assuming the 90 days trading horizon Buana Finance Tbk is expected to under-perform the Bank BRISyariah. But the stock apears to be less risky and, when comparing its historical volatility, Buana Finance Tbk is 1.13 times less risky than Bank BRISyariah. The stock trades about -0.08 of its potential returns per unit of risk. The Bank BRISyariah Tbk is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 296,000 in Bank BRISyariah Tbk on August 31, 2024 and sell it today you would lose (5,000) from holding Bank BRISyariah Tbk or give up 1.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Buana Finance Tbk vs. Bank BRISyariah Tbk
Performance |
| Timeline |
| Buana Finance Tbk |
| Bank BRISyariah Tbk |
Buana Finance and Bank BRISyariah Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Buana Finance and Bank BRISyariah
The main advantage of trading using opposite Buana Finance and Bank BRISyariah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Buana Finance 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.| Buana Finance vs. Bank BRISyariah Tbk | Buana Finance vs. Ace Hardware Indonesia | Buana Finance vs. Merdeka Copper Gold | Buana Finance vs. Mitra Pinasthika Mustika |
| Bank BRISyariah vs. Aneka Tambang Persero | Bank BRISyariah vs. Sido Muncul PT | Bank BRISyariah vs. Indofood Cbp Sukses | Bank BRISyariah vs. Bank Tabungan Pensiunan |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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