Correlation Between Bhuwanatala Indah and Intanwijaya Internasional
Can any of the company-specific risk be diversified away by investing in both Bhuwanatala Indah and Intanwijaya Internasional 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 Bhuwanatala Indah and Intanwijaya Internasional into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bhuwanatala Indah Permai and Intanwijaya Internasional Tbk, you can compare the effects of market volatilities on Bhuwanatala Indah and Intanwijaya Internasional 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 Bhuwanatala Indah with a short position of Intanwijaya Internasional. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bhuwanatala Indah and Intanwijaya Internasional.
Diversification Opportunities for Bhuwanatala Indah and Intanwijaya Internasional
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bhuwanatala and Intanwijaya is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Bhuwanatala Indah Permai and Intanwijaya Internasional Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intanwijaya Internasional and Bhuwanatala Indah 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 Bhuwanatala Indah Permai are associated (or correlated) with Intanwijaya Internasional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intanwijaya Internasional has no effect on the direction of Bhuwanatala Indah i.e., Bhuwanatala Indah and Intanwijaya Internasional go up and down completely randomly.
Pair Corralation between Bhuwanatala Indah and Intanwijaya Internasional
Assuming the 90 days trading horizon Bhuwanatala Indah Permai is expected to generate 2.5 times more return on investment than Intanwijaya Internasional. However, Bhuwanatala Indah is 2.5 times more volatile than Intanwijaya Internasional Tbk. It trades about 0.11 of its potential returns per unit of risk. Intanwijaya Internasional Tbk is currently generating about 0.08 per unit of risk. If you would invest 2,100 in Bhuwanatala Indah Permai on September 13, 2024 and sell it today you would earn a total of 1,100 from holding Bhuwanatala Indah Permai or generate 52.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bhuwanatala Indah Permai vs. Intanwijaya Internasional Tbk
Performance |
| Timeline |
| Bhuwanatala Indah Permai |
| Intanwijaya Internasional |
Bhuwanatala Indah and Intanwijaya Internasional Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bhuwanatala Indah and Intanwijaya Internasional
The main advantage of trading using opposite Bhuwanatala Indah and Intanwijaya Internasional positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bhuwanatala Indah position performs unexpectedly, Intanwijaya Internasional 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 Intanwijaya Internasional will offset losses from the drop in Intanwijaya Internasional's long position.| 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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