Correlation Between Total Bangun and Bukaka Teknik
Can any of the company-specific risk be diversified away by investing in both Total Bangun and Bukaka Teknik 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 Total Bangun and Bukaka Teknik into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Total Bangun Persada and Bukaka Teknik Utama, you can compare the effects of market volatilities on Total Bangun and Bukaka Teknik 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 Total Bangun with a short position of Bukaka Teknik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Total Bangun and Bukaka Teknik.
Diversification Opportunities for Total Bangun and Bukaka Teknik
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Total and Bukaka is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Total Bangun Persada and Bukaka Teknik Utama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bukaka Teknik Utama and Total 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 Total Bangun Persada are associated (or correlated) with Bukaka Teknik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bukaka Teknik Utama has no effect on the direction of Total Bangun i.e., Total Bangun and Bukaka Teknik go up and down completely randomly.
Pair Corralation between Total Bangun and Bukaka Teknik
Assuming the 90 days trading horizon Total Bangun Persada is expected to under-perform the Bukaka Teknik. In addition to that, Total Bangun is 1.47 times more volatile than Bukaka Teknik Utama. It trades about -0.23 of its total potential returns per unit of risk. Bukaka Teknik Utama is currently generating about -0.1 per unit of volatility. If you would invest 96,000 in Bukaka Teknik Utama on October 26, 2024 and sell it today you would lose (9,000) from holding Bukaka Teknik Utama or give up 9.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.33% |
| Values | Daily Returns |
Total Bangun Persada vs. Bukaka Teknik Utama
Performance |
| Timeline |
| Total Bangun Persada |
| Bukaka Teknik Utama |
Total Bangun and Bukaka Teknik Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Total Bangun and Bukaka Teknik
The main advantage of trading using opposite Total Bangun and Bukaka Teknik positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Total Bangun position performs unexpectedly, Bukaka Teknik 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 Bukaka Teknik will offset losses from the drop in Bukaka Teknik's long position.| Total Bangun vs. Kawasan Industri Jababeka | Total Bangun vs. Adhi Karya Persero | Total Bangun vs. Ciputra Development Tbk | Total Bangun vs. Solusi Bangun Indonesia |
| Bukaka Teknik vs. Indo Kordsa Tbk | Bukaka Teknik vs. Wilmar Cahaya Indonesia | Bukaka Teknik vs. Citra Marga Nusaphala | Bukaka Teknik vs. Darya Varia Laboratoria 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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