Correlation Between Leyand International and Buana Finance
Can any of the company-specific risk be diversified away by investing in both Leyand International 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 Leyand International and Buana Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leyand International Tbk and Buana Finance Tbk, you can compare the effects of market volatilities on Leyand International 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 Leyand International with a short position of Buana Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leyand International and Buana Finance.
Diversification Opportunities for Leyand International and Buana Finance
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Leyand and Buana is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Leyand International Tbk 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 Leyand International 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 Leyand International Tbk 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 Leyand International i.e., Leyand International and Buana Finance go up and down completely randomly.
Pair Corralation between Leyand International and Buana Finance
Assuming the 90 days trading horizon Leyand International Tbk is expected to generate 6.63 times more return on investment than Buana Finance. However, Leyand International is 6.63 times more volatile than Buana Finance Tbk. It trades about 0.15 of its potential returns per unit of risk. Buana Finance Tbk is currently generating about 0.22 per unit of risk. If you would invest 600.00 in Leyand International Tbk on January 28, 2024 and sell it today you would earn a total of 100.00 from holding Leyand International Tbk or generate 16.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Leyand International Tbk vs. Buana Finance Tbk
Performance |
Timeline |
Leyand International Tbk |
Buana Finance Tbk |
Leyand International and Buana Finance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Leyand International and Buana Finance
The main advantage of trading using opposite Leyand International and Buana Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leyand International 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.Leyand International vs. Puradelta Lestari PT | Leyand International vs. Mitra Pinasthika Mustika | Leyand International vs. Wijaya Karya Bangunan | Leyand International vs. PT Sarana Menara |
Buana Finance vs. Asuransi Ramayana Tbk | Buana Finance vs. Clipan Finance Indonesia | Buana Finance vs. Asuransi Bintang Tbk | Buana Finance vs. Asuransi Dayin Mitra |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |