Correlation Between Clipan Finance and Bank Bumi
Can any of the company-specific risk be diversified away by investing in both Clipan Finance and Bank Bumi 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 Clipan Finance and Bank Bumi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clipan Finance Indonesia and Bank Bumi Arta, you can compare the effects of market volatilities on Clipan Finance and Bank Bumi 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 Clipan Finance with a short position of Bank Bumi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clipan Finance and Bank Bumi.
Diversification Opportunities for Clipan Finance and Bank Bumi
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Clipan and Bank is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Clipan Finance Indonesia and Bank Bumi Arta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Bumi Arta and Clipan 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 Clipan Finance Indonesia are associated (or correlated) with Bank Bumi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Bumi Arta has no effect on the direction of Clipan Finance i.e., Clipan Finance and Bank Bumi go up and down completely randomly.
Pair Corralation between Clipan Finance and Bank Bumi
Assuming the 90 days trading horizon Clipan Finance Indonesia is expected to under-perform the Bank Bumi. But the stock apears to be less risky and, when comparing its historical volatility, Clipan Finance Indonesia is 1.91 times less risky than Bank Bumi. The stock trades about -0.7 of its potential returns per unit of risk. The Bank Bumi Arta is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 71,500 in Bank Bumi Arta on August 31, 2024 and sell it today you would lose (4,000) from holding Bank Bumi Arta or give up 5.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clipan Finance Indonesia vs. Bank Bumi Arta
Performance |
| Timeline |
| Clipan Finance Indonesia |
| Bank Bumi Arta |
Clipan Finance and Bank Bumi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clipan Finance and Bank Bumi
The main advantage of trading using opposite Clipan Finance and Bank Bumi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clipan Finance position performs unexpectedly, Bank Bumi 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 Bank Bumi will offset losses from the drop in Bank Bumi's long position.| Clipan Finance vs. BFI Finance Indonesia | Clipan Finance vs. Adira Dinamika Multi | Clipan Finance vs. Paninvest Tbk | Clipan Finance vs. Panin Financial Tbk |
| Bank Bumi vs. Bank BRISyariah Tbk | Bank Bumi vs. Ace Hardware Indonesia | Bank Bumi vs. Merdeka Copper Gold | Bank Bumi vs. Mitra Pinasthika Mustika |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |