Correlation Between Bakrieland Development and Arkadia Digital
Can any of the company-specific risk be diversified away by investing in both Bakrieland Development and Arkadia Digital 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 Arkadia Digital 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 Arkadia Digital Media, you can compare the effects of market volatilities on Bakrieland Development and Arkadia Digital 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 Arkadia Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bakrieland Development and Arkadia Digital.
Diversification Opportunities for Bakrieland Development and Arkadia Digital
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bakrieland and Arkadia is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Bakrieland Development Tbk and Arkadia Digital Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arkadia Digital Media 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 Arkadia Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arkadia Digital Media has no effect on the direction of Bakrieland Development i.e., Bakrieland Development and Arkadia Digital go up and down completely randomly.
Pair Corralation between Bakrieland Development and Arkadia Digital
Assuming the 90 days trading horizon Bakrieland Development Tbk is expected to under-perform the Arkadia Digital. In addition to that, Bakrieland Development is 1.15 times more volatile than Arkadia Digital Media. It trades about -0.05 of its total potential returns per unit of risk. Arkadia Digital Media is currently generating about -0.06 per unit of volatility. If you would invest 5,000 in Arkadia Digital Media on August 27, 2024 and sell it today you would lose (3,500) from holding Arkadia Digital Media or give up 70.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.72% |
| Values | Daily Returns |
Bakrieland Development Tbk vs. Arkadia Digital Media
Performance |
| Timeline |
| Bakrieland Development |
| Arkadia Digital Media |
Bakrieland Development and Arkadia Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bakrieland Development and Arkadia Digital
The main advantage of trading using opposite Bakrieland Development and Arkadia Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bakrieland Development position performs unexpectedly, Arkadia Digital 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 Arkadia Digital will offset losses from the drop in Arkadia Digital's long position.| Bakrieland Development vs. Bakrie Brothers Tbk | Bakrieland Development vs. Bakrie Sumatera Plantations | Bakrieland Development vs. Energi Mega Persada | Bakrieland Development vs. Darma Henwa Tbk |
| Arkadia Digital vs. Electronic City Indonesia | Arkadia Digital vs. MD Pictures Tbk | Arkadia Digital vs. Bintang Oto Global | Arkadia Digital vs. Graha Layar Prima |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |