Correlation Between Bumi Serpong and Kawasan Industri
Can any of the company-specific risk be diversified away by investing in both Bumi Serpong and Kawasan Industri 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 Kawasan Industri 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 Kawasan Industri Jababeka, you can compare the effects of market volatilities on Bumi Serpong and Kawasan Industri 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 Kawasan Industri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bumi Serpong and Kawasan Industri.
Diversification Opportunities for Bumi Serpong and Kawasan Industri
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bumi and Kawasan is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Bumi Serpong Damai and Kawasan Industri Jababeka in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kawasan Industri Jababeka 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 Kawasan Industri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kawasan Industri Jababeka has no effect on the direction of Bumi Serpong i.e., Bumi Serpong and Kawasan Industri go up and down completely randomly.
Pair Corralation between Bumi Serpong and Kawasan Industri
Assuming the 90 days trading horizon Bumi Serpong Damai is expected to under-perform the Kawasan Industri. In addition to that, Bumi Serpong is 1.67 times more volatile than Kawasan Industri Jababeka. It trades about -0.41 of its total potential returns per unit of risk. Kawasan Industri Jababeka is currently generating about 0.14 per unit of volatility. If you would invest 19,200 in Kawasan Industri Jababeka on August 28, 2024 and sell it today you would earn a total of 600.00 from holding Kawasan Industri Jababeka or generate 3.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bumi Serpong Damai vs. Kawasan Industri Jababeka
Performance |
| Timeline |
| Bumi Serpong Damai |
| Kawasan Industri Jababeka |
Bumi Serpong and Kawasan Industri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bumi Serpong and Kawasan Industri
The main advantage of trading using opposite Bumi Serpong and Kawasan Industri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bumi Serpong position performs unexpectedly, Kawasan Industri 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 Kawasan Industri will offset losses from the drop in Kawasan Industri's long position.| Bumi Serpong vs. Alam Sutera Realty | Bumi Serpong vs. Ciputra Development Tbk | Bumi Serpong vs. Summarecon Agung Tbk | Bumi Serpong vs. Pakuwon Jati Tbk |
| Kawasan Industri vs. Bakrieland Development Tbk | Kawasan Industri vs. Ciputra Development Tbk | Kawasan Industri vs. Sentul City Tbk | Kawasan Industri vs. Solusi Bangun Indonesia |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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