Correlation Between BFI Finance and Sumber Alfaria
Can any of the company-specific risk be diversified away by investing in both BFI Finance and Sumber Alfaria 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 BFI Finance and Sumber Alfaria into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BFI Finance Indonesia and Sumber Alfaria Trijaya, you can compare the effects of market volatilities on BFI Finance and Sumber Alfaria 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 BFI Finance with a short position of Sumber Alfaria. Check out your portfolio center. Please also check ongoing floating volatility patterns of BFI Finance and Sumber Alfaria.
Diversification Opportunities for BFI Finance and Sumber Alfaria
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between BFI and Sumber is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding BFI Finance Indonesia and Sumber Alfaria Trijaya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumber Alfaria Trijaya and BFI 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 BFI Finance Indonesia are associated (or correlated) with Sumber Alfaria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumber Alfaria Trijaya has no effect on the direction of BFI Finance i.e., BFI Finance and Sumber Alfaria go up and down completely randomly.
Pair Corralation between BFI Finance and Sumber Alfaria
Assuming the 90 days trading horizon BFI Finance is expected to generate 4.67 times less return on investment than Sumber Alfaria. In addition to that, BFI Finance is 1.28 times more volatile than Sumber Alfaria Trijaya. It trades about 0.0 of its total potential returns per unit of risk. Sumber Alfaria Trijaya is currently generating about 0.01 per unit of volatility. If you would invest 282,628 in Sumber Alfaria Trijaya on August 28, 2024 and sell it today you would earn a total of 11,372 from holding Sumber Alfaria Trijaya or generate 4.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
BFI Finance Indonesia vs. Sumber Alfaria Trijaya
Performance |
| Timeline |
| BFI Finance Indonesia |
| Sumber Alfaria Trijaya |
BFI Finance and Sumber Alfaria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BFI Finance and Sumber Alfaria
The main advantage of trading using opposite BFI Finance and Sumber Alfaria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BFI Finance position performs unexpectedly, Sumber Alfaria 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 Sumber Alfaria will offset losses from the drop in Sumber Alfaria's long position.| BFI Finance vs. Adira Dinamika Multi | BFI Finance vs. Clipan Finance Indonesia | BFI Finance vs. Sumber Alfaria Trijaya | BFI Finance vs. Bank Permata Tbk |
| Sumber Alfaria vs. Elang Mahkota Teknologi | Sumber Alfaria vs. Ace Hardware Indonesia | Sumber Alfaria vs. BFI Finance Indonesia | Sumber Alfaria vs. Tower Bersama Infrastructure |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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