Correlation Between Solusi Bangun and Bakrieland Development
Can any of the company-specific risk be diversified away by investing in both Solusi Bangun 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 Solusi Bangun and Bakrieland Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solusi Bangun Indonesia and Bakrieland Development Tbk, you can compare the effects of market volatilities on Solusi Bangun 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 Solusi Bangun with a short position of Bakrieland Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solusi Bangun and Bakrieland Development.
Diversification Opportunities for Solusi Bangun and Bakrieland Development
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Solusi and Bakrieland is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Solusi Bangun Indonesia and Bakrieland Development Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bakrieland Development and Solusi Bangun 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 Solusi Bangun Indonesia 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 Solusi Bangun i.e., Solusi Bangun and Bakrieland Development go up and down completely randomly.
Pair Corralation between Solusi Bangun and Bakrieland Development
Assuming the 90 days trading horizon Solusi Bangun is expected to generate 2.48 times less return on investment than Bakrieland Development. But when comparing it to its historical volatility, Solusi Bangun Indonesia is 2.85 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 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,200 in Bakrieland Development Tbk on November 5, 2024 and sell it today you would earn a total of 100.00 from holding Bakrieland Development Tbk or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Solusi Bangun Indonesia vs. Bakrieland Development Tbk
Performance |
| Timeline |
| Solusi Bangun Indonesia |
| Bakrieland Development |
Solusi Bangun and Bakrieland Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solusi Bangun and Bakrieland Development
The main advantage of trading using opposite Solusi Bangun and Bakrieland Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solusi Bangun 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.| Solusi Bangun vs. Semen Indonesia Persero | Solusi Bangun vs. Indocement Tunggal Prakarsa | Solusi Bangun vs. Bakrie Sumatera Plantations | Solusi Bangun vs. Timah Persero Tbk |
| 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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