Correlation Between Bakrieland Development and Delta Dunia
Can any of the company-specific risk be diversified away by investing in both Bakrieland Development and Delta Dunia 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 Delta Dunia 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 Delta Dunia Makmur, you can compare the effects of market volatilities on Bakrieland Development and Delta Dunia 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 Delta Dunia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bakrieland Development and Delta Dunia.
Diversification Opportunities for Bakrieland Development and Delta Dunia
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bakrieland and Delta is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Bakrieland Development Tbk and Delta Dunia Makmur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Dunia Makmur 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 Delta Dunia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Dunia Makmur has no effect on the direction of Bakrieland Development i.e., Bakrieland Development and Delta Dunia go up and down completely randomly.
Pair Corralation between Bakrieland Development and Delta Dunia
Assuming the 90 days trading horizon Bakrieland Development Tbk is expected to under-perform the Delta Dunia. In addition to that, Bakrieland Development is 1.05 times more volatile than Delta Dunia Makmur. It trades about -0.49 of its total potential returns per unit of risk. Delta Dunia Makmur is currently generating about 0.09 per unit of volatility. If you would invest 67,000 in Delta Dunia Makmur on August 27, 2024 and sell it today you would earn a total of 3,500 from holding Delta Dunia Makmur or generate 5.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bakrieland Development Tbk vs. Delta Dunia Makmur
Performance |
| Timeline |
| Bakrieland Development |
| Delta Dunia Makmur |
Bakrieland Development and Delta Dunia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bakrieland Development and Delta Dunia
The main advantage of trading using opposite Bakrieland Development and Delta Dunia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bakrieland Development position performs unexpectedly, Delta Dunia 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 Delta Dunia will offset losses from the drop in Delta Dunia'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 |
| Delta Dunia vs. Indika Energy Tbk | Delta Dunia vs. Elnusa Tbk | Delta Dunia vs. Harum Energy Tbk | Delta Dunia vs. Energi Mega Persada |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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