Correlation Between Visa and Bayu Buana
Can any of the company-specific risk be diversified away by investing in both Visa and Bayu Buana 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 Visa and Bayu Buana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Bayu Buana Tbk, you can compare the effects of market volatilities on Visa and Bayu Buana 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 Visa with a short position of Bayu Buana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Bayu Buana.
Diversification Opportunities for Visa and Bayu Buana
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Visa and Bayu is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Bayu Buana Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayu Buana Tbk and Visa 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 Visa Class A are associated (or correlated) with Bayu Buana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayu Buana Tbk has no effect on the direction of Visa i.e., Visa and Bayu Buana go up and down completely randomly.
Pair Corralation between Visa and Bayu Buana
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.99 times more return on investment than Bayu Buana. However, Visa Class A is 1.01 times less risky than Bayu Buana. It trades about 0.1 of its potential returns per unit of risk. Bayu Buana Tbk is currently generating about 0.03 per unit of risk. If you would invest 27,139 in Visa Class A on August 29, 2024 and sell it today you would earn a total of 4,331 from holding Visa Class A or generate 15.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Bayu Buana Tbk
Performance |
| Timeline |
| Visa Class A |
| Bayu Buana Tbk |
Visa and Bayu Buana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Bayu Buana
The main advantage of trading using opposite Visa and Bayu Buana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Bayu Buana 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 Bayu Buana will offset losses from the drop in Bayu Buana's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Bayu Buana vs. Akbar Indomakmur Stimec | Bayu Buana vs. Mahaka Media Tbk | Bayu Buana vs. Fortune Indonesia Tbk | Bayu Buana vs. Gema Grahasarana 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |