Correlation Between Sentul City and Bukit Darmo
Can any of the company-specific risk be diversified away by investing in both Sentul City and Bukit Darmo 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 Sentul City and Bukit Darmo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sentul City Tbk and Bukit Darmo Property, you can compare the effects of market volatilities on Sentul City and Bukit Darmo 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 Sentul City with a short position of Bukit Darmo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentul City and Bukit Darmo.
Diversification Opportunities for Sentul City and Bukit Darmo
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sentul and Bukit is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Sentul City Tbk and Bukit Darmo Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bukit Darmo Property and Sentul City 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 Sentul City Tbk are associated (or correlated) with Bukit Darmo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bukit Darmo Property has no effect on the direction of Sentul City i.e., Sentul City and Bukit Darmo go up and down completely randomly.
Pair Corralation between Sentul City and Bukit Darmo
Assuming the 90 days trading horizon Sentul City Tbk is expected to under-perform the Bukit Darmo. In addition to that, Sentul City is 2.0 times more volatile than Bukit Darmo Property. It trades about -0.07 of its total potential returns per unit of risk. Bukit Darmo Property is currently generating about 0.06 per unit of volatility. If you would invest 4,900 in Bukit Darmo Property on August 31, 2024 and sell it today you would earn a total of 100.00 from holding Bukit Darmo Property or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sentul City Tbk vs. Bukit Darmo Property
Performance |
| Timeline |
| Sentul City Tbk |
| Bukit Darmo Property |
Sentul City and Bukit Darmo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sentul City and Bukit Darmo
The main advantage of trading using opposite Sentul City and Bukit Darmo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentul City position performs unexpectedly, Bukit Darmo 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 Bukit Darmo will offset losses from the drop in Bukit Darmo's long position.| Sentul City vs. Alam Sutera Realty | Sentul City vs. Kawasan Industri Jababeka | Sentul City vs. Lippo Karawaci Tbk | Sentul City vs. Ciputra Development Tbk |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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