Correlation Between Visa and Buana Finance
Can any of the company-specific risk be diversified away by investing in both Visa 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 Visa and Buana Finance 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 Buana Finance Tbk, you can compare the effects of market volatilities on Visa 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 Visa with a short position of Buana Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Buana Finance.
Diversification Opportunities for Visa and Buana Finance
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Visa and Buana is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A 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 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 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 Visa i.e., Visa and Buana Finance go up and down completely randomly.
Pair Corralation between Visa and Buana Finance
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.31 times more return on investment than Buana Finance. However, Visa Class A is 3.26 times less risky than Buana Finance. It trades about 0.09 of its potential returns per unit of risk. Buana Finance Tbk is currently generating about 0.01 per unit of risk. If you would invest 25,267 in Visa Class A on August 31, 2024 and sell it today you would earn a total of 6,203 from holding Visa Class A or generate 24.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 93.98% |
| Values | Daily Returns |
Visa Class A vs. Buana Finance Tbk
Performance |
| Timeline |
| Visa Class A |
| Buana Finance Tbk |
Visa and Buana Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Buana Finance
The main advantage of trading using opposite Visa and Buana Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Buana Finance vs. Bank BRISyariah Tbk | Buana Finance vs. Ace Hardware Indonesia | Buana Finance vs. Merdeka Copper Gold | Buana Finance 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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