Correlation Between Bangun Karya and PT Dewi
Can any of the company-specific risk be diversified away by investing in both Bangun Karya and PT Dewi 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 Bangun Karya and PT Dewi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bangun Karya Perkasa and PT Dewi Shri, you can compare the effects of market volatilities on Bangun Karya and PT Dewi 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 Bangun Karya with a short position of PT Dewi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangun Karya and PT Dewi.
Diversification Opportunities for Bangun Karya and PT Dewi
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bangun and DEWI is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Bangun Karya Perkasa and PT Dewi Shri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Dewi Shri and Bangun Karya 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 Bangun Karya Perkasa are associated (or correlated) with PT Dewi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Dewi Shri has no effect on the direction of Bangun Karya i.e., Bangun Karya and PT Dewi go up and down completely randomly.
Pair Corralation between Bangun Karya and PT Dewi
Assuming the 90 days trading horizon Bangun Karya is expected to generate 2.23 times less return on investment than PT Dewi. But when comparing it to its historical volatility, Bangun Karya Perkasa is 1.39 times less risky than PT Dewi. It trades about 0.04 of its potential returns per unit of risk. PT Dewi Shri is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 6,500 in PT Dewi Shri on August 28, 2024 and sell it today you would earn a total of 1,700 from holding PT Dewi Shri or generate 26.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Bangun Karya Perkasa vs. PT Dewi Shri
Performance |
| Timeline |
| Bangun Karya Perkasa |
| PT Dewi Shri |
Bangun Karya and PT Dewi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangun Karya and PT Dewi
The main advantage of trading using opposite Bangun Karya and PT Dewi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangun Karya position performs unexpectedly, PT Dewi 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 PT Dewi will offset losses from the drop in PT Dewi's long position.| Bangun Karya vs. Indo Kordsa Tbk | Bangun Karya vs. Wilmar Cahaya Indonesia | Bangun Karya vs. Citra Marga Nusaphala | Bangun Karya vs. Darya Varia Laboratoria Tbk |
| PT Dewi vs. Dharma Satya Nusantara | PT Dewi vs. Saratoga Investama Sedaya | PT Dewi vs. Surya Esa Perkasa | PT Dewi vs. Elang Mahkota Teknologi |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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