Correlation Between Bank Artos and PT Bukalapak

Can any of the company-specific risk be diversified away by investing in both Bank Artos and PT Bukalapak 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 Bank Artos and PT Bukalapak into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bank Artos Indonesia and PT Bukalapak, you can compare the effects of market volatilities on Bank Artos and PT Bukalapak 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 Bank Artos with a short position of PT Bukalapak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Artos and PT Bukalapak.

Diversification Opportunities for Bank Artos and PT Bukalapak

0.1

Correlation Coefficient

Bank Artos  PT Bukalapak

Average diversification

The 3 months correlation between Bank and BUKA is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Bank Artos Indonesia and PT Bukalapak in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bukalapak and Bank Artos 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 Bank Artos Indonesia are associated (or correlated) with PT Bukalapak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bukalapak has no effect on the direction of Bank Artos i.e., Bank Artos and PT Bukalapak go up and down completely randomly.

Pair Corralation between Bank Artos and PT Bukalapak

Assuming the 90 days trading horizon Bank Artos Indonesia is expected to under-perform the PT Bukalapak. In addition to that, Bank Artos is 1.38 times more volatile than PT Bukalapak. It trades about -0.11 of its total potential returns per unit of risk. PT Bukalapak is currently generating about -0.1 per unit of volatility. If you would invest  12,800  in PT Bukalapak on September 1, 2024 and sell it today you would lose (600.00) from holding PT Bukalapak or give up 4.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Bank Artos Indonesia  vs.  PT Bukalapak

Bank Artos Indonesia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bank Artos Indonesia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

PT Bukalapak

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PT Bukalapak are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, PT Bukalapak may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Bank Artos and PT Bukalapak

The main advantage of trading using opposite Bank Artos and PT Bukalapak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Artos position performs unexpectedly, PT Bukalapak 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 Bukalapak will offset losses from the drop in PT Bukalapak's long position.

The idea behind Bank Artos Indonesia and PT Bukalapak pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.