Correlation Between Capital Income and Bakrieland Development
Can any of the company-specific risk be diversified away by investing in both Capital Income and Bakrieland Development 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 Capital Income and Bakrieland Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Income Builder and Bakrieland Development Tbk, you can compare the effects of market volatilities on Capital Income and Bakrieland Development 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 Capital Income with a short position of Bakrieland Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Income and Bakrieland Development.
Diversification Opportunities for Capital Income and Bakrieland Development
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Capital and Bakrieland is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Capital Income Builder and Bakrieland Development Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bakrieland Development and Capital Income 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 Capital Income Builder are associated (or correlated) with Bakrieland Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bakrieland Development has no effect on the direction of Capital Income i.e., Capital Income and Bakrieland Development go up and down completely randomly.
Pair Corralation between Capital Income and Bakrieland Development
Assuming the 90 days horizon Capital Income Builder is expected to generate 0.08 times more return on investment than Bakrieland Development. However, Capital Income Builder is 11.93 times less risky than Bakrieland Development. It trades about 0.08 of its potential returns per unit of risk. Bakrieland Development Tbk is currently generating about -0.06 per unit of risk. If you would invest 6,375 in Capital Income Builder on November 3, 2024 and sell it today you would earn a total of 724.00 from holding Capital Income Builder or generate 11.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 93.12% |
| Values | Daily Returns |
Capital Income Builder vs. Bakrieland Development Tbk
Performance |
| Timeline |
| Capital Income Builder |
| Bakrieland Development |
Capital Income and Bakrieland Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Income and Bakrieland Development
The main advantage of trading using opposite Capital Income and Bakrieland Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Income position performs unexpectedly, Bakrieland Development 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 Bakrieland Development will offset losses from the drop in Bakrieland Development's long position.| Capital Income vs. Dws Global Macro | Capital Income vs. Rbb Fund | Capital Income vs. Kinetics Global Fund | Capital Income vs. Ms Global Fixed |
| Bakrieland Development vs. Bakrie Brothers Tbk | Bakrieland Development vs. Bakrie Sumatera Plantations | Bakrieland Development vs. Energi Mega Persada | Bakrieland Development vs. Darma Henwa 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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