Correlation Between Batavia Prosperindo and Buana Finance
Can any of the company-specific risk be diversified away by investing in both Batavia Prosperindo and Buana Finance 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 Batavia Prosperindo and Buana Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Batavia Prosperindo Finance and Buana Finance Tbk, you can compare the effects of market volatilities on Batavia Prosperindo and Buana Finance 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 Batavia Prosperindo with a short position of Buana Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Batavia Prosperindo and Buana Finance.
Diversification Opportunities for Batavia Prosperindo and Buana Finance
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Batavia and Buana is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Batavia Prosperindo Finance and Buana Finance Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Buana Finance Tbk and Batavia Prosperindo 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 Batavia Prosperindo Finance are associated (or correlated) with Buana Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Buana Finance Tbk has no effect on the direction of Batavia Prosperindo i.e., Batavia Prosperindo and Buana Finance go up and down completely randomly.
Pair Corralation between Batavia Prosperindo and Buana Finance
Assuming the 90 days trading horizon Batavia Prosperindo Finance is expected to under-perform the Buana Finance. But the stock apears to be less risky and, when comparing its historical volatility, Batavia Prosperindo Finance is 1.04 times less risky than Buana Finance. The stock trades about -0.03 of its potential returns per unit of risk. The Buana Finance Tbk is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 57,596 in Buana Finance Tbk on August 24, 2024 and sell it today you would earn a total of 8,404 from holding Buana Finance Tbk or generate 14.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Batavia Prosperindo Finance vs. Buana Finance Tbk
Performance |
| Timeline |
| Batavia Prosperindo |
| Buana Finance Tbk |
Batavia Prosperindo and Buana Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Batavia Prosperindo and Buana Finance
The main advantage of trading using opposite Batavia Prosperindo and Buana Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Batavia Prosperindo position performs unexpectedly, Buana Finance 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 Buana Finance will offset losses from the drop in Buana Finance's long position.| Batavia Prosperindo vs. Buana Finance Tbk | Batavia Prosperindo vs. Clipan Finance Indonesia | Batavia Prosperindo vs. Asuransi Bintang Tbk | Batavia Prosperindo vs. Bank Bumi Arta |
| Buana Finance vs. Paninvest Tbk | Buana Finance vs. Maskapai Reasuransi Indonesia | Buana Finance vs. Panin Sekuritas Tbk | Buana Finance vs. Wahana Ottomitra Multiartha |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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