Correlation Between Bukaka Teknik and Centratama Telekomunikasi
Can any of the company-specific risk be diversified away by investing in both Bukaka Teknik and Centratama Telekomunikasi 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 Bukaka Teknik and Centratama Telekomunikasi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bukaka Teknik Utama and Centratama Telekomunikasi Ind, you can compare the effects of market volatilities on Bukaka Teknik and Centratama Telekomunikasi 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 Bukaka Teknik with a short position of Centratama Telekomunikasi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bukaka Teknik and Centratama Telekomunikasi.
Diversification Opportunities for Bukaka Teknik and Centratama Telekomunikasi
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bukaka and Centratama is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Bukaka Teknik Utama and Centratama Telekomunikasi Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centratama Telekomunikasi and Bukaka Teknik 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 Bukaka Teknik Utama are associated (or correlated) with Centratama Telekomunikasi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centratama Telekomunikasi has no effect on the direction of Bukaka Teknik i.e., Bukaka Teknik and Centratama Telekomunikasi go up and down completely randomly.
Pair Corralation between Bukaka Teknik and Centratama Telekomunikasi
Assuming the 90 days trading horizon Bukaka Teknik Utama is expected to generate 0.67 times more return on investment than Centratama Telekomunikasi. However, Bukaka Teknik Utama is 1.5 times less risky than Centratama Telekomunikasi. It trades about -0.03 of its potential returns per unit of risk. Centratama Telekomunikasi Ind is currently generating about -0.03 per unit of risk. If you would invest 115,000 in Bukaka Teknik Utama on October 27, 2024 and sell it today you would lose (28,000) from holding Bukaka Teknik Utama or give up 24.35% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Bukaka Teknik Utama vs. Centratama Telekomunikasi Ind
Performance |
Timeline |
Bukaka Teknik Utama |
Centratama Telekomunikasi |
Bukaka Teknik and Centratama Telekomunikasi Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bukaka Teknik and Centratama Telekomunikasi
The main advantage of trading using opposite Bukaka Teknik and Centratama Telekomunikasi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bukaka Teknik position performs unexpectedly, Centratama Telekomunikasi 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 Centratama Telekomunikasi will offset losses from the drop in Centratama Telekomunikasi's long position.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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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