Correlation Between Apple and Bakrieland Development
Can any of the company-specific risk be diversified away by investing in both Apple and Bakrieland Development 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 Apple and Bakrieland Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Bakrieland Development Tbk, you can compare the effects of market volatilities on Apple and Bakrieland Development 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 Apple with a short position of Bakrieland Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Bakrieland Development.
Diversification Opportunities for Apple and Bakrieland Development
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Apple and Bakrieland is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Bakrieland Development Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bakrieland Development and Apple 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 Apple Inc are associated (or correlated) with Bakrieland Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bakrieland Development has no effect on the direction of Apple i.e., Apple and Bakrieland Development go up and down completely randomly.
Pair Corralation between Apple and Bakrieland Development
Given the investment horizon of 90 days Apple Inc is expected to under-perform the Bakrieland Development. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc is 2.05 times less risky than Bakrieland Development. The stock trades about -0.08 of its potential returns per unit of risk. The Bakrieland Development Tbk is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,100 in Bakrieland Development Tbk on November 3, 2024 and sell it today you would earn a total of 200.00 from holding Bakrieland Development Tbk or generate 18.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Apple Inc vs. Bakrieland Development Tbk
Performance |
| Timeline |
| Apple Inc |
| Bakrieland Development |
Apple and Bakrieland Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Bakrieland Development
The main advantage of trading using opposite Apple and Bakrieland Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Bakrieland Development 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 Bakrieland Development will offset losses from the drop in Bakrieland Development's long position.The idea behind Apple Inc and Bakrieland Development 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.| Bakrieland Development vs. Bakrie Brothers Tbk | Bakrieland Development vs. Bakrie Sumatera Plantations | Bakrieland Development vs. Energi Mega Persada | Bakrieland Development vs. Darma Henwa 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |