Correlation Between Perdana Gapura and Bukit Darmo

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

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

Diversification Opportunities for Perdana Gapura and Bukit Darmo

0.82

Correlation Coefficient

Perdana Gapura  Bukit Darmo

Very poor diversification

The 3 months correlation between Perdana and Bukit is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Perdana Gapura Prima and Bukit Darmo Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bukit Darmo Property and Perdana Gapura 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 Perdana Gapura Prima are associated (or correlated) with Bukit Darmo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bukit Darmo Property has no effect on the direction of Perdana Gapura i.e., Perdana Gapura and Bukit Darmo go up and down completely randomly.

Pair Corralation between Perdana Gapura and Bukit Darmo

Assuming the 90 days trading horizon Perdana Gapura Prima is expected to generate 0.62 times more return on investment than Bukit Darmo. However, Perdana Gapura Prima is 1.62 times less risky than Bukit Darmo. It trades about -0.04 of its potential returns per unit of risk. Bukit Darmo Property is currently generating about -0.15 per unit of risk. If you would invest  8,500  in Perdana Gapura Prima on December 30, 2024 and sell it today you would lose (400.00) from holding Perdana Gapura Prima or give up 4.71% of portfolio value over 90 days.

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

Perdana Gapura Prima  vs.  Bukit Darmo Property

Perdana Gapura Prima

Risk-Adjusted Performance

Very Weak

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

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 conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Perdana Gapura and Bukit Darmo

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

The idea behind Perdana Gapura Prima and Bukit Darmo Property 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.