Correlation Between Buana Finance and Paninvest Tbk
Can any of the company-specific risk be diversified away by investing in both Buana Finance and Paninvest Tbk 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 Paninvest Tbk 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 Paninvest Tbk, you can compare the effects of market volatilities on Buana Finance and Paninvest Tbk 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 Paninvest Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Buana Finance and Paninvest Tbk.
Diversification Opportunities for Buana Finance and Paninvest Tbk
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Buana and Paninvest is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Buana Finance Tbk and Paninvest Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paninvest 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 Paninvest Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paninvest Tbk has no effect on the direction of Buana Finance i.e., Buana Finance and Paninvest Tbk go up and down completely randomly.
Pair Corralation between Buana Finance and Paninvest Tbk
Assuming the 90 days trading horizon Buana Finance Tbk is expected to generate 1.61 times more return on investment than Paninvest Tbk. However, Buana Finance is 1.61 times more volatile than Paninvest Tbk. It trades about 0.03 of its potential returns per unit of risk. Paninvest Tbk is currently generating about -0.03 per unit of risk. If you would invest 51,459 in Buana Finance Tbk on December 2, 2024 and sell it today you would earn a total of 9,541 from holding Buana Finance Tbk or generate 18.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Buana Finance Tbk vs. Paninvest Tbk
Performance |
| Timeline |
| Buana Finance Tbk |
| Paninvest Tbk |
Buana Finance and Paninvest Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Buana Finance and Paninvest Tbk
The main advantage of trading using opposite Buana Finance and Paninvest Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Buana Finance position performs unexpectedly, Paninvest Tbk 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 Paninvest Tbk will offset losses from the drop in Paninvest Tbk's long position.| Buana Finance vs. Asuransi Ramayana Tbk | Buana Finance vs. Clipan Finance Indonesia | Buana Finance vs. Asuransi Bintang Tbk | Buana Finance vs. Asuransi Dayin Mitra |
| Paninvest Tbk vs. Panin Financial Tbk | Paninvest Tbk vs. Bank Pan Indonesia | Paninvest Tbk vs. Panin Sekuritas Tbk | Paninvest Tbk vs. Clipan Finance Indonesia |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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