Correlation Between Bisi International and Hexindo Adiperkasa

Can any of the company-specific risk be diversified away by investing in both Bisi International and Hexindo Adiperkasa 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 Bisi International and Hexindo Adiperkasa into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bisi International Tbk and Hexindo Adiperkasa Tbk, you can compare the effects of market volatilities on Bisi International and Hexindo Adiperkasa 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 Bisi International with a short position of Hexindo Adiperkasa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bisi International and Hexindo Adiperkasa.

Diversification Opportunities for Bisi International and Hexindo Adiperkasa

0.3

Correlation Coefficient

Bisi International  Hexindo Adiperkasa

Weak diversification

The 3 months correlation between Bisi and Hexindo is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Bisi International Tbk and Hexindo Adiperkasa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hexindo Adiperkasa Tbk and Bisi 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 Bisi International Tbk are associated (or correlated) with Hexindo Adiperkasa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hexindo Adiperkasa Tbk has no effect on the direction of Bisi International i.e., Bisi International and Hexindo Adiperkasa go up and down completely randomly.

Pair Corralation between Bisi International and Hexindo Adiperkasa

Assuming the 90 days trading horizon Bisi International Tbk is expected to generate 1.65 times more return on investment than Hexindo Adiperkasa. However, Bisi International is 1.65 times more volatile than Hexindo Adiperkasa Tbk. It trades about -0.05 of its potential returns per unit of risk. Hexindo Adiperkasa Tbk is currently generating about -0.12 per unit of risk. If you would invest  120,000  in Bisi International Tbk on December 30, 2024 and sell it today you would lose (13,000) from holding Bisi International Tbk or give up 10.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Bisi International Tbk  vs.  Hexindo Adiperkasa Tbk

Bisi International Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bisi International Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Hexindo Adiperkasa Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hexindo Adiperkasa Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Bisi International and Hexindo Adiperkasa

The main advantage of trading using opposite Bisi International and Hexindo Adiperkasa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bisi International position performs unexpectedly, Hexindo Adiperkasa 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 Hexindo Adiperkasa will offset losses from the drop in Hexindo Adiperkasa's long position.

The idea behind Bisi International Tbk and Hexindo Adiperkasa Tbk pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.