Correlation Between BFI Finance and Asuransi Dayin
Can any of the company-specific risk be diversified away by investing in both BFI Finance and Asuransi Dayin 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 Asuransi Dayin 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 Asuransi Dayin Mitra, you can compare the effects of market volatilities on BFI Finance and Asuransi Dayin 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 Asuransi Dayin. Check out your portfolio center. Please also check ongoing floating volatility patterns of BFI Finance and Asuransi Dayin.
Diversification Opportunities for BFI Finance and Asuransi Dayin
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BFI and Asuransi is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding BFI Finance Indonesia and Asuransi Dayin Mitra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asuransi Dayin Mitra 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 Asuransi Dayin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asuransi Dayin Mitra has no effect on the direction of BFI Finance i.e., BFI Finance and Asuransi Dayin go up and down completely randomly.
Pair Corralation between BFI Finance and Asuransi Dayin
Assuming the 90 days trading horizon BFI Finance Indonesia is expected to under-perform the Asuransi Dayin. In addition to that, BFI Finance is 2.46 times more volatile than Asuransi Dayin Mitra. It trades about -0.12 of its total potential returns per unit of risk. Asuransi Dayin Mitra is currently generating about -0.06 per unit of volatility. If you would invest 50,000 in Asuransi Dayin Mitra on August 31, 2024 and sell it today you would lose (800.00) from holding Asuransi Dayin Mitra or give up 1.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BFI Finance Indonesia vs. Asuransi Dayin Mitra
Performance |
| Timeline |
| BFI Finance Indonesia |
| Asuransi Dayin Mitra |
BFI Finance and Asuransi Dayin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BFI Finance and Asuransi Dayin
The main advantage of trading using opposite BFI Finance and Asuransi Dayin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BFI Finance position performs unexpectedly, Asuransi Dayin 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 Asuransi Dayin will offset losses from the drop in Asuransi Dayin'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 |
| Asuransi Dayin vs. Asuransi Bintang Tbk | Asuransi Dayin vs. Asuransi Bina Dana | Asuransi Dayin vs. Asuransi Ramayana Tbk | Asuransi Dayin vs. Asuransi Harta Aman |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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