Correlation Between Trust Finance and Radana Bhaskara
Can any of the company-specific risk be diversified away by investing in both Trust Finance and Radana Bhaskara 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 Trust Finance and Radana Bhaskara into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trust Finance Indonesia and Radana Bhaskara Finance, you can compare the effects of market volatilities on Trust Finance and Radana Bhaskara 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 Trust Finance with a short position of Radana Bhaskara. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trust Finance and Radana Bhaskara.
Diversification Opportunities for Trust Finance and Radana Bhaskara
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Trust and Radana is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Trust Finance Indonesia and Radana Bhaskara Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radana Bhaskara Finance and Trust 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 Trust Finance Indonesia are associated (or correlated) with Radana Bhaskara. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radana Bhaskara Finance has no effect on the direction of Trust Finance i.e., Trust Finance and Radana Bhaskara go up and down completely randomly.
Pair Corralation between Trust Finance and Radana Bhaskara
Assuming the 90 days trading horizon Trust Finance Indonesia is expected to generate 1.82 times more return on investment than Radana Bhaskara. However, Trust Finance is 1.82 times more volatile than Radana Bhaskara Finance. It trades about 0.04 of its potential returns per unit of risk. Radana Bhaskara Finance is currently generating about -0.11 per unit of risk. If you would invest 44,200 in Trust Finance Indonesia on August 28, 2024 and sell it today you would earn a total of 600.00 from holding Trust Finance Indonesia or generate 1.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trust Finance Indonesia vs. Radana Bhaskara Finance
Performance |
| Timeline |
| Trust Finance Indonesia |
| Radana Bhaskara Finance |
Trust Finance and Radana Bhaskara Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trust Finance and Radana Bhaskara
The main advantage of trading using opposite Trust Finance and Radana Bhaskara positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trust Finance position performs unexpectedly, Radana Bhaskara 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 Radana Bhaskara will offset losses from the drop in Radana Bhaskara's long position.| Trust Finance vs. Wahana Ottomitra Multiartha | Trust Finance vs. Yulie Sekurindo Tbk | Trust Finance vs. Trimegah Securities Tbk | Trust Finance vs. Mandala Multifinance Tbk |
| Radana Bhaskara vs. Equity Development Investment | Radana Bhaskara vs. Buana Finance Tbk | Radana Bhaskara vs. Batavia Prosperindo Finance | Radana Bhaskara 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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