Correlation Between Bakrieland Development and Buyung Poetra
Can any of the company-specific risk be diversified away by investing in both Bakrieland Development and Buyung Poetra 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 Buyung Poetra 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 Buyung Poetra Sembada, you can compare the effects of market volatilities on Bakrieland Development and Buyung Poetra 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 Buyung Poetra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bakrieland Development and Buyung Poetra.
Diversification Opportunities for Bakrieland Development and Buyung Poetra
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bakrieland and Buyung is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Bakrieland Development Tbk and Buyung Poetra Sembada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Buyung Poetra Sembada 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 Buyung Poetra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Buyung Poetra Sembada has no effect on the direction of Bakrieland Development i.e., Bakrieland Development and Buyung Poetra go up and down completely randomly.
Pair Corralation between Bakrieland Development and Buyung Poetra
Assuming the 90 days trading horizon Bakrieland Development Tbk is expected to generate 2.75 times more return on investment than Buyung Poetra. However, Bakrieland Development is 2.75 times more volatile than Buyung Poetra Sembada. It trades about 0.03 of its potential returns per unit of risk. Buyung Poetra Sembada is currently generating about -0.2 per unit of risk. If you would invest 1,300 in Bakrieland Development Tbk on November 28, 2024 and sell it today you would earn a total of 0.00 from holding Bakrieland Development Tbk or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bakrieland Development Tbk vs. Buyung Poetra Sembada
Performance |
| Timeline |
| Bakrieland Development |
| Buyung Poetra Sembada |
Bakrieland Development and Buyung Poetra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bakrieland Development and Buyung Poetra
The main advantage of trading using opposite Bakrieland Development and Buyung Poetra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bakrieland Development position performs unexpectedly, Buyung Poetra 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 Buyung Poetra will offset losses from the drop in Buyung Poetra'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 |
| Buyung Poetra vs. Integra Indocabinet Tbk | Buyung Poetra vs. Sariguna Primatirta PT | Buyung Poetra vs. Erajaya Swasembada Tbk | Buyung Poetra vs. Puradelta Lestari PT |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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