Correlation Between Bakrieland Development and Elang Mahkota
Can any of the company-specific risk be diversified away by investing in both Bakrieland Development and Elang Mahkota 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 Elang Mahkota 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 Elang Mahkota Teknologi, you can compare the effects of market volatilities on Bakrieland Development and Elang Mahkota 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 Elang Mahkota. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bakrieland Development and Elang Mahkota.
Diversification Opportunities for Bakrieland Development and Elang Mahkota
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bakrieland and Elang is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Bakrieland Development Tbk and Elang Mahkota Teknologi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elang Mahkota Teknologi 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 Elang Mahkota. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elang Mahkota Teknologi has no effect on the direction of Bakrieland Development i.e., Bakrieland Development and Elang Mahkota go up and down completely randomly.
Pair Corralation between Bakrieland Development and Elang Mahkota
Assuming the 90 days trading horizon Bakrieland Development Tbk is expected to under-perform the Elang Mahkota. In addition to that, Bakrieland Development is 1.19 times more volatile than Elang Mahkota Teknologi. It trades about -0.55 of its total potential returns per unit of risk. Elang Mahkota Teknologi is currently generating about 0.0 per unit of volatility. If you would invest 49,600 in Elang Mahkota Teknologi on August 30, 2024 and sell it today you would lose (600.00) from holding Elang Mahkota Teknologi or give up 1.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bakrieland Development Tbk vs. Elang Mahkota Teknologi
Performance |
| Timeline |
| Bakrieland Development |
| Elang Mahkota Teknologi |
Bakrieland Development and Elang Mahkota Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bakrieland Development and Elang Mahkota
The main advantage of trading using opposite Bakrieland Development and Elang Mahkota positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bakrieland Development position performs unexpectedly, Elang Mahkota 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 Elang Mahkota will offset losses from the drop in Elang Mahkota'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 |
| Elang Mahkota vs. Bank Artos Indonesia | Elang Mahkota vs. PT Bukalapak | Elang Mahkota vs. Sumber Alfaria Trijaya | Elang Mahkota vs. Merdeka Copper Gold |
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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