Correlation Between Buana Listya and Intanwijaya Internasional
Can any of the company-specific risk be diversified away by investing in both Buana Listya and Intanwijaya Internasional 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 Buana Listya and Intanwijaya Internasional into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Buana Listya Tama and Intanwijaya Internasional Tbk, you can compare the effects of market volatilities on Buana Listya and Intanwijaya Internasional 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 Buana Listya with a short position of Intanwijaya Internasional. Check out your portfolio center. Please also check ongoing floating volatility patterns of Buana Listya and Intanwijaya Internasional.
Diversification Opportunities for Buana Listya and Intanwijaya Internasional
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Buana and Intanwijaya is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Buana Listya Tama and Intanwijaya Internasional Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intanwijaya Internasional and Buana Listya 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 Buana Listya Tama are associated (or correlated) with Intanwijaya Internasional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intanwijaya Internasional has no effect on the direction of Buana Listya i.e., Buana Listya and Intanwijaya Internasional go up and down completely randomly.
Pair Corralation between Buana Listya and Intanwijaya Internasional
Assuming the 90 days trading horizon Buana Listya Tama is expected to generate 1.51 times more return on investment than Intanwijaya Internasional. However, Buana Listya is 1.51 times more volatile than Intanwijaya Internasional Tbk. It trades about 0.17 of its potential returns per unit of risk. Intanwijaya Internasional Tbk is currently generating about -0.02 per unit of risk. If you would invest 11,400 in Buana Listya Tama on September 12, 2024 and sell it today you would earn a total of 800.00 from holding Buana Listya Tama or generate 7.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Buana Listya Tama vs. Intanwijaya Internasional Tbk
Performance |
| Timeline |
| Buana Listya Tama |
| Intanwijaya Internasional |
Buana Listya and Intanwijaya Internasional Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Buana Listya and Intanwijaya Internasional
The main advantage of trading using opposite Buana Listya and Intanwijaya Internasional positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Buana Listya position performs unexpectedly, Intanwijaya Internasional 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 Intanwijaya Internasional will offset losses from the drop in Intanwijaya Internasional's long position.| Buana Listya vs. Galva Technologies Tbk | Buana Listya vs. Trinitan Metals and | Buana Listya vs. Siloam International Hospitals | Buana Listya vs. PT UBC Medical |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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