Correlation Between Bisi International and Central Proteina
Can any of the company-specific risk be diversified away by investing in both Bisi International and Central Proteina 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 Bisi International and Central Proteina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bisi International Tbk and Central Proteina Prima, you can compare the effects of market volatilities on Bisi International and Central Proteina 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 Bisi International with a short position of Central Proteina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bisi International and Central Proteina.
Diversification Opportunities for Bisi International and Central Proteina
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bisi and Central is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Bisi International Tbk and Central Proteina Prima in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Proteina Prima and Bisi International 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 Bisi International Tbk are associated (or correlated) with Central Proteina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Proteina Prima has no effect on the direction of Bisi International i.e., Bisi International and Central Proteina go up and down completely randomly.
Pair Corralation between Bisi International and Central Proteina
Assuming the 90 days trading horizon Bisi International Tbk is expected to under-perform the Central Proteina. But the stock apears to be less risky and, when comparing its historical volatility, Bisi International Tbk is 1.25 times less risky than Central Proteina. The stock trades about -0.04 of its potential returns per unit of risk. The Central Proteina Prima is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 5,000 in Central Proteina Prima on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Central Proteina Prima or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.72% |
| Values | Daily Returns |
Bisi International Tbk vs. Central Proteina Prima
Performance |
| Timeline |
| Bisi International Tbk |
| Central Proteina Prima |
Bisi International and Central Proteina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bisi International and Central Proteina
The main advantage of trading using opposite Bisi International and Central Proteina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bisi International position performs unexpectedly, Central Proteina 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 Central Proteina will offset losses from the drop in Central Proteina's long position.| Bisi International vs. Sampoerna Agro Tbk | Bisi International vs. Bakrie Sumatera Plantations | Bisi International vs. Tunas Baru Lampung | Bisi International vs. Darma Henwa Tbk |
| Central Proteina vs. Bank BRISyariah Tbk | Central Proteina vs. Mitra Pinasthika Mustika | Central Proteina vs. Jakarta Int Hotels | Central Proteina vs. Indosterling Technomedia Tbk |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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