Correlation Between BFI Finance and Paninvest Tbk
Can any of the company-specific risk be diversified away by investing in both BFI 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 BFI 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 BFI Finance Indonesia and Paninvest Tbk, you can compare the effects of market volatilities on BFI 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 BFI Finance with a short position of Paninvest Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of BFI Finance and Paninvest Tbk.
Diversification Opportunities for BFI Finance and Paninvest Tbk
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BFI and Paninvest is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding BFI Finance Indonesia and Paninvest Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paninvest Tbk 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 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 BFI Finance i.e., BFI Finance and Paninvest Tbk go up and down completely randomly.
Pair Corralation between BFI Finance and Paninvest Tbk
Assuming the 90 days trading horizon BFI Finance Indonesia is expected to generate 1.2 times more return on investment than Paninvest Tbk. However, BFI Finance is 1.2 times more volatile than Paninvest Tbk. It trades about 0.01 of its potential returns per unit of risk. Paninvest Tbk is currently generating about -0.04 per unit of risk. If you would invest 93,500 in BFI Finance Indonesia on September 12, 2024 and sell it today you would lose (500.00) from holding BFI Finance Indonesia or give up 0.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BFI Finance Indonesia vs. Paninvest Tbk
Performance |
| Timeline |
| BFI Finance Indonesia |
| Paninvest Tbk |
BFI Finance and Paninvest Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BFI Finance and Paninvest Tbk
The main advantage of trading using opposite BFI Finance and Paninvest Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BFI 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.| BFI Finance vs. Adira Dinamika Multi | BFI Finance vs. Clipan Finance Indonesia | BFI Finance vs. Sumber Alfaria Trijaya | BFI Finance vs. Bank Permata Tbk |
| 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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