Correlation Between Wulandari Bangun and PT Bukalapak

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

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

Diversification Opportunities for Wulandari Bangun and PT Bukalapak

0.19

Correlation Coefficient

Wulandari Bangun  PT Bukalapak

Average diversification

The 3 months correlation between Wulandari and BUKA is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Wulandari Bangun Laksana and PT Bukalapak in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bukalapak and Wulandari 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 Wulandari Bangun Laksana 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 Wulandari Bangun i.e., Wulandari Bangun and PT Bukalapak go up and down completely randomly.

Pair Corralation between Wulandari Bangun and PT Bukalapak

Assuming the 90 days trading horizon Wulandari Bangun Laksana is expected to under-perform the PT Bukalapak. But the stock apears to be less risky and, when comparing its historical volatility, Wulandari Bangun Laksana is 1.24 times less risky than PT Bukalapak. The stock trades about -0.06 of its potential returns per unit of risk. The PT Bukalapak is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  11,900  in PT Bukalapak on September 19, 2024 and sell it today you would earn a total of  400.00  from holding PT Bukalapak or generate 3.36% return on investment over 90 days.

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

Wulandari Bangun Laksana  vs.  PT Bukalapak

Wulandari Bangun Laksana

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wulandari Bangun Laksana 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 January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

PT Bukalapak

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PT Bukalapak are ranked lower than 3 (%) 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 January 2025.

Pair Trading with Wulandari Bangun and PT Bukalapak

The main advantage of trading using opposite Wulandari Bangun and PT Bukalapak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wulandari Bangun 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 Wulandari Bangun Laksana 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.