Correlation Between Tunas Baru and Bakrieland Development
Can any of the company-specific risk be diversified away by investing in both Tunas Baru 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 Tunas Baru and Bakrieland Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tunas Baru Lampung and Bakrieland Development Tbk, you can compare the effects of market volatilities on Tunas Baru 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 Tunas Baru with a short position of Bakrieland Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tunas Baru and Bakrieland Development.
Diversification Opportunities for Tunas Baru and Bakrieland Development
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tunas and Bakrieland is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Tunas Baru Lampung and Bakrieland Development Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bakrieland Development and Tunas Baru 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 Tunas Baru Lampung 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 Tunas Baru i.e., Tunas Baru and Bakrieland Development go up and down completely randomly.
Pair Corralation between Tunas Baru and Bakrieland Development
Assuming the 90 days trading horizon Tunas Baru Lampung is expected to generate 0.35 times more return on investment than Bakrieland Development. However, Tunas Baru Lampung is 2.86 times less risky than Bakrieland Development. It trades about 0.03 of its potential returns per unit of risk. Bakrieland Development Tbk is currently generating about -0.06 per unit of risk. If you would invest 56,724 in Tunas Baru Lampung on September 2, 2024 and sell it today you would earn a total of 6,776 from holding Tunas Baru Lampung or generate 11.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tunas Baru Lampung vs. Bakrieland Development Tbk
Performance |
| Timeline |
| Tunas Baru Lampung |
| Bakrieland Development |
Tunas Baru and Bakrieland Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tunas Baru and Bakrieland Development
The main advantage of trading using opposite Tunas Baru and Bakrieland Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tunas Baru 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.| Tunas Baru vs. Bank BRISyariah Tbk | Tunas Baru vs. Mitra Pinasthika Mustika | Tunas Baru vs. Jakarta Int Hotels | Tunas Baru vs. Indosterling Technomedia Tbk |
| Bakrieland Development vs. Lippo Cikarang Tbk | Bakrieland Development vs. Lippo Karawaci Tbk | Bakrieland Development vs. Mitra Pinasthika Mustika | Bakrieland Development vs. Jakarta Int Hotels |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |