Correlation Between Smartfren Telecom and Bukit Uluwatu
Can any of the company-specific risk be diversified away by investing in both Smartfren Telecom and Bukit Uluwatu 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 Smartfren Telecom and Bukit Uluwatu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smartfren Telecom Tbk and Bukit Uluwatu Villa, you can compare the effects of market volatilities on Smartfren Telecom and Bukit Uluwatu 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 Smartfren Telecom with a short position of Bukit Uluwatu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smartfren Telecom and Bukit Uluwatu.
Diversification Opportunities for Smartfren Telecom and Bukit Uluwatu
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Smartfren and Bukit is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Smartfren Telecom Tbk and Bukit Uluwatu Villa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bukit Uluwatu Villa and Smartfren Telecom 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 Smartfren Telecom Tbk are associated (or correlated) with Bukit Uluwatu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bukit Uluwatu Villa has no effect on the direction of Smartfren Telecom i.e., Smartfren Telecom and Bukit Uluwatu go up and down completely randomly.
Pair Corralation between Smartfren Telecom and Bukit Uluwatu
Assuming the 90 days trading horizon Smartfren Telecom Tbk is expected to under-perform the Bukit Uluwatu. But the stock apears to be less risky and, when comparing its historical volatility, Smartfren Telecom Tbk is 2.01 times less risky than Bukit Uluwatu. The stock trades about -0.05 of its potential returns per unit of risk. The Bukit Uluwatu Villa is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 5,300 in Bukit Uluwatu Villa on November 28, 2024 and sell it today you would earn a total of 2,200 from holding Bukit Uluwatu Villa or generate 41.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.17% |
| Values | Daily Returns |
Smartfren Telecom Tbk vs. Bukit Uluwatu Villa
Performance |
| Timeline |
| Smartfren Telecom Tbk |
| Bukit Uluwatu Villa |
Smartfren Telecom and Bukit Uluwatu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smartfren Telecom and Bukit Uluwatu
The main advantage of trading using opposite Smartfren Telecom and Bukit Uluwatu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smartfren Telecom position performs unexpectedly, Bukit Uluwatu 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 Bukit Uluwatu will offset losses from the drop in Bukit Uluwatu's long position.| Smartfren Telecom vs. Indosat Tbk | Smartfren Telecom vs. XL Axiata Tbk | Smartfren Telecom vs. Energi Mega Persada | Smartfren Telecom vs. Bakrie Brothers Tbk |
| Bukit Uluwatu vs. Metrodata Electronics Tbk | Bukit Uluwatu vs. Tera Data Indonusa | Bukit Uluwatu vs. Fast Food Indonesia | Bukit Uluwatu vs. Lotte Chemical Titan |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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