Correlation Between Alam Sutera and Bhuwanatala Indah
Can any of the company-specific risk be diversified away by investing in both Alam Sutera and Bhuwanatala Indah 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 Alam Sutera and Bhuwanatala Indah into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alam Sutera Realty and Bhuwanatala Indah Permai, you can compare the effects of market volatilities on Alam Sutera and Bhuwanatala Indah 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 Alam Sutera with a short position of Bhuwanatala Indah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alam Sutera and Bhuwanatala Indah.
Diversification Opportunities for Alam Sutera and Bhuwanatala Indah
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alam and Bhuwanatala is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Alam Sutera Realty and Bhuwanatala Indah Permai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bhuwanatala Indah Permai and Alam Sutera 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 Alam Sutera Realty are associated (or correlated) with Bhuwanatala Indah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bhuwanatala Indah Permai has no effect on the direction of Alam Sutera i.e., Alam Sutera and Bhuwanatala Indah go up and down completely randomly.
Pair Corralation between Alam Sutera and Bhuwanatala Indah
Assuming the 90 days trading horizon Alam Sutera Realty is expected to under-perform the Bhuwanatala Indah. But the stock apears to be less risky and, when comparing its historical volatility, Alam Sutera Realty is 1.17 times less risky than Bhuwanatala Indah. The stock trades about -0.1 of its potential returns per unit of risk. The Bhuwanatala Indah Permai is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3,200 in Bhuwanatala Indah Permai on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Bhuwanatala Indah Permai or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alam Sutera Realty vs. Bhuwanatala Indah Permai
Performance |
| Timeline |
| Alam Sutera Realty |
| Bhuwanatala Indah Permai |
Alam Sutera and Bhuwanatala Indah Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alam Sutera and Bhuwanatala Indah
The main advantage of trading using opposite Alam Sutera and Bhuwanatala Indah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alam Sutera position performs unexpectedly, Bhuwanatala Indah 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 Bhuwanatala Indah will offset losses from the drop in Bhuwanatala Indah's long position.| Alam Sutera vs. Bumi Serpong Damai | Alam Sutera vs. Summarecon Agung Tbk | Alam Sutera vs. Lippo Karawaci Tbk | Alam Sutera vs. Ciputra Development Tbk |
| Bhuwanatala Indah vs. Ciputra Development Tbk | Bhuwanatala Indah vs. Bumi Serpong Damai | Bhuwanatala Indah vs. Alam Sutera Realty | Bhuwanatala Indah vs. Lippo Karawaci 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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