Correlation Between Bukit Darmo and Duta Anggada

Can any of the company-specific risk be diversified away by investing in both Bukit Darmo and Duta Anggada 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 Bukit Darmo and Duta Anggada into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bukit Darmo Property and Duta Anggada Realty, you can compare the effects of market volatilities on Bukit Darmo and Duta Anggada 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 Bukit Darmo with a short position of Duta Anggada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bukit Darmo and Duta Anggada.

Diversification Opportunities for Bukit Darmo and Duta Anggada

0.42

Correlation Coefficient

Bukit Darmo  Duta Anggada

Very weak diversification

The 3 months correlation between Bukit and Duta is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Bukit Darmo Property and Duta Anggada Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duta Anggada Realty and Bukit Darmo 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 Bukit Darmo Property are associated (or correlated) with Duta Anggada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duta Anggada Realty has no effect on the direction of Bukit Darmo i.e., Bukit Darmo and Duta Anggada go up and down completely randomly.

Pair Corralation between Bukit Darmo and Duta Anggada

Assuming the 90 days trading horizon Bukit Darmo Property is expected to generate 2.58 times more return on investment than Duta Anggada. However, Bukit Darmo is 2.58 times more volatile than Duta Anggada Realty. It trades about -0.03 of its potential returns per unit of risk. Duta Anggada Realty is currently generating about -0.24 per unit of risk. If you would invest  4,900  in Bukit Darmo Property on December 2, 2024 and sell it today you would lose (100.00) from holding Bukit Darmo Property or give up 2.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Bukit Darmo Property  vs.  Duta Anggada Realty

Bukit Darmo Property

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bukit Darmo Property has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Bukit Darmo is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Duta Anggada Realty

Risk-Adjusted Performance

Very Weak

Over the last 90 days Duta Anggada Realty 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.

Pair Trading with Bukit Darmo and Duta Anggada

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

The idea behind Bukit Darmo Property and Duta Anggada Realty 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..