Correlation Between Bumi Serpong and Bhuwanatala Indah
Can any of the company-specific risk be diversified away by investing in both Bumi Serpong 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 Bumi Serpong and Bhuwanatala Indah into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bumi Serpong Damai and Bhuwanatala Indah Permai, you can compare the effects of market volatilities on Bumi Serpong 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 Bumi Serpong with a short position of Bhuwanatala Indah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bumi Serpong and Bhuwanatala Indah.
Diversification Opportunities for Bumi Serpong and Bhuwanatala Indah
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bumi and Bhuwanatala is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Bumi Serpong Damai 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 Bumi Serpong 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 Bumi Serpong Damai 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 Bumi Serpong i.e., Bumi Serpong and Bhuwanatala Indah go up and down completely randomly.
Pair Corralation between Bumi Serpong and Bhuwanatala Indah
Assuming the 90 days trading horizon Bumi Serpong Damai is expected to under-perform the Bhuwanatala Indah. But the stock apears to be less risky and, when comparing its historical volatility, Bumi Serpong Damai is 1.86 times less risky than Bhuwanatala Indah. The stock trades about -0.35 of its potential returns per unit of risk. The Bhuwanatala Indah Permai is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,000 in Bhuwanatala Indah Permai on September 13, 2024 and sell it today you would earn a total of 200.00 from holding Bhuwanatala Indah Permai or generate 6.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bumi Serpong Damai vs. Bhuwanatala Indah Permai
Performance |
| Timeline |
| Bumi Serpong Damai |
| Bhuwanatala Indah Permai |
Bumi Serpong and Bhuwanatala Indah Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bumi Serpong and Bhuwanatala Indah
The main advantage of trading using opposite Bumi Serpong and Bhuwanatala Indah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bumi Serpong 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.| Bumi Serpong vs. Ciputra Development Tbk | Bumi Serpong vs. Alam Sutera Realty | Bumi Serpong vs. Lippo Karawaci 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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