Correlation Between Intiland Development and Bumi Citra
Can any of the company-specific risk be diversified away by investing in both Intiland Development and Bumi Citra 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 Intiland Development and Bumi Citra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intiland Development Tbk and Bumi Citra Permai, you can compare the effects of market volatilities on Intiland Development and Bumi Citra 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 Intiland Development with a short position of Bumi Citra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intiland Development and Bumi Citra.
Diversification Opportunities for Intiland Development and Bumi Citra
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Intiland and Bumi is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Intiland Development Tbk and Bumi Citra Permai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bumi Citra Permai and Intiland Development 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 Intiland Development Tbk are associated (or correlated) with Bumi Citra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bumi Citra Permai has no effect on the direction of Intiland Development i.e., Intiland Development and Bumi Citra go up and down completely randomly.
Pair Corralation between Intiland Development and Bumi Citra
Assuming the 90 days trading horizon Intiland Development Tbk is expected to under-perform the Bumi Citra. But the stock apears to be less risky and, when comparing its historical volatility, Intiland Development Tbk is 2.46 times less risky than Bumi Citra. The stock trades about -0.09 of its potential returns per unit of risk. The Bumi Citra Permai is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 5,100 in Bumi Citra Permai on September 2, 2024 and sell it today you would earn a total of 600.00 from holding Bumi Citra Permai or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intiland Development Tbk vs. Bumi Citra Permai
Performance |
| Timeline |
| Intiland Development Tbk |
| Bumi Citra Permai |
Intiland Development and Bumi Citra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intiland Development and Bumi Citra
The main advantage of trading using opposite Intiland Development and Bumi Citra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intiland Development position performs unexpectedly, Bumi Citra 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 Bumi Citra will offset losses from the drop in Bumi Citra's long position.| Intiland Development vs. Sentul City Tbk | Intiland Development vs. Modernland Realty Ltd | Intiland Development vs. Kawasan Industri Jababeka | Intiland Development vs. Ciputra Development Tbk |
| Bumi Citra vs. Lippo Cikarang Tbk | Bumi Citra vs. Lippo Karawaci Tbk | Bumi Citra vs. Mitra Pinasthika Mustika | Bumi Citra vs. Jakarta Int Hotels |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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