Correlation Between Bakrieland Development and PT Bukalapak
Can any of the company-specific risk be diversified away by investing in both Bakrieland Development and PT Bukalapak 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 Bakrieland Development and PT Bukalapak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bakrieland Development Tbk and PT Bukalapak, you can compare the effects of market volatilities on Bakrieland Development and PT Bukalapak 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 Bakrieland Development with a short position of PT Bukalapak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bakrieland Development and PT Bukalapak.
Diversification Opportunities for Bakrieland Development and PT Bukalapak
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bakrieland and BUKA is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Bakrieland Development Tbk and PT Bukalapak in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bukalapak and Bakrieland 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 Bakrieland Development Tbk are associated (or correlated) with PT Bukalapak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bukalapak has no effect on the direction of Bakrieland Development i.e., Bakrieland Development and PT Bukalapak go up and down completely randomly.
Pair Corralation between Bakrieland Development and PT Bukalapak
Assuming the 90 days trading horizon Bakrieland Development Tbk is expected to under-perform the PT Bukalapak. In addition to that, Bakrieland Development is 1.64 times more volatile than PT Bukalapak. It trades about -0.06 of its total potential returns per unit of risk. PT Bukalapak is currently generating about -0.04 per unit of volatility. If you would invest 21,600 in PT Bukalapak on September 1, 2024 and sell it today you would lose (9,400) from holding PT Bukalapak or give up 43.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bakrieland Development Tbk vs. PT Bukalapak
Performance |
| Timeline |
| Bakrieland Development |
| PT Bukalapak |
Bakrieland Development and PT Bukalapak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bakrieland Development and PT Bukalapak
The main advantage of trading using opposite Bakrieland Development and PT Bukalapak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bakrieland Development position performs unexpectedly, PT Bukalapak 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 PT Bukalapak will offset losses from the drop in PT Bukalapak's long position.| Bakrieland Development vs. Lippo Cikarang Tbk | Bakrieland Development vs. Lippo Karawaci Tbk | Bakrieland Development vs. Intiland Development Tbk | Bakrieland Development vs. Mitra Pinasthika Mustika |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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