Correlation Between Alam Sutera and Bumi Serpong
Can any of the company-specific risk be diversified away by investing in both Alam Sutera and Bumi Serpong 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 Bumi Serpong 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 Bumi Serpong Damai, you can compare the effects of market volatilities on Alam Sutera and Bumi Serpong 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 Bumi Serpong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alam Sutera and Bumi Serpong.
Diversification Opportunities for Alam Sutera and Bumi Serpong
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Alam and Bumi is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Alam Sutera Realty and Bumi Serpong Damai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bumi Serpong Damai 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 Bumi Serpong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bumi Serpong Damai has no effect on the direction of Alam Sutera i.e., Alam Sutera and Bumi Serpong go up and down completely randomly.
Pair Corralation between Alam Sutera and Bumi Serpong
Assuming the 90 days trading horizon Alam Sutera Realty is expected to generate 1.87 times more return on investment than Bumi Serpong. However, Alam Sutera is 1.87 times more volatile than Bumi Serpong Damai. It trades about 0.18 of its potential returns per unit of risk. Bumi Serpong Damai is currently generating about -0.03 per unit of risk. If you would invest 13,600 in Alam Sutera Realty on October 24, 2024 and sell it today you would earn a total of 1,200 from holding Alam Sutera Realty or generate 8.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alam Sutera Realty vs. Bumi Serpong Damai
Performance |
| Timeline |
| Alam Sutera Realty |
| Bumi Serpong Damai |
Alam Sutera and Bumi Serpong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alam Sutera and Bumi Serpong
The main advantage of trading using opposite Alam Sutera and Bumi Serpong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alam Sutera position performs unexpectedly, Bumi Serpong 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 Bumi Serpong will offset losses from the drop in Bumi Serpong'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 |
| Bumi Serpong vs. Alam Sutera Realty | Bumi Serpong vs. Ciputra Development Tbk | Bumi Serpong vs. Summarecon Agung Tbk | Bumi Serpong vs. Pakuwon Jati 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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