Correlation Between Pudjiadi Sons and Bakrieland Development
Can any of the company-specific risk be diversified away by investing in both Pudjiadi Sons and Bakrieland Development 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 Pudjiadi Sons and Bakrieland Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pudjiadi Sons Tbk and Bakrieland Development Tbk, you can compare the effects of market volatilities on Pudjiadi Sons and Bakrieland Development 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 Pudjiadi Sons with a short position of Bakrieland Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pudjiadi Sons and Bakrieland Development.
Diversification Opportunities for Pudjiadi Sons and Bakrieland Development
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pudjiadi and Bakrieland is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Pudjiadi Sons Tbk and Bakrieland Development Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bakrieland Development and Pudjiadi Sons 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 Pudjiadi Sons Tbk are associated (or correlated) with Bakrieland Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bakrieland Development has no effect on the direction of Pudjiadi Sons i.e., Pudjiadi Sons and Bakrieland Development go up and down completely randomly.
Pair Corralation between Pudjiadi Sons and Bakrieland Development
Assuming the 90 days trading horizon Pudjiadi Sons Tbk is expected to generate 0.8 times more return on investment than Bakrieland Development. However, Pudjiadi Sons Tbk is 1.24 times less risky than Bakrieland Development. It trades about 0.18 of its potential returns per unit of risk. Bakrieland Development Tbk is currently generating about 0.08 per unit of risk. If you would invest 44,800 in Pudjiadi Sons Tbk on August 30, 2024 and sell it today you would earn a total of 91,200 from holding Pudjiadi Sons Tbk or generate 203.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pudjiadi Sons Tbk vs. Bakrieland Development Tbk
Performance |
| Timeline |
| Pudjiadi Sons Tbk |
| Bakrieland Development |
Pudjiadi Sons and Bakrieland Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pudjiadi Sons and Bakrieland Development
The main advantage of trading using opposite Pudjiadi Sons and Bakrieland Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pudjiadi Sons position performs unexpectedly, Bakrieland Development 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 Bakrieland Development will offset losses from the drop in Bakrieland Development's long position.| Pudjiadi Sons vs. HK Metals Utama | Pudjiadi Sons vs. Alumindo Light Metal | Pudjiadi Sons vs. PT Data Sinergitama | Pudjiadi Sons vs. Ciptadana Asset Management |
| Bakrieland Development vs. Bakrie Brothers Tbk | Bakrieland Development vs. Bakrie Sumatera Plantations | Bakrieland Development vs. Energi Mega Persada | Bakrieland Development vs. Darma Henwa Tbk |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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