Correlation Between Bukaka Teknik and Andalan Sakti

Can any of the company-specific risk be diversified away by investing in both Bukaka Teknik and Andalan Sakti 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 Andalan Sakti 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 Andalan Sakti Primaindo, you can compare the effects of market volatilities on Bukaka Teknik and Andalan Sakti 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 Andalan Sakti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bukaka Teknik and Andalan Sakti.

Diversification Opportunities for Bukaka Teknik and Andalan Sakti

0.82

Correlation Coefficient

Bukaka Teknik  Andalan Sakti

Very poor diversification

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

Pair Corralation between Bukaka Teknik and Andalan Sakti

Assuming the 90 days trading horizon Bukaka Teknik Utama is expected to generate 0.36 times more return on investment than Andalan Sakti. However, Bukaka Teknik Utama is 2.78 times less risky than Andalan Sakti. It trades about -0.12 of its potential returns per unit of risk. Andalan Sakti Primaindo is currently generating about -0.34 per unit of risk. If you would invest  97,500  in Bukaka Teknik Utama on September 25, 2024 and sell it today you would lose (9,500) from holding Bukaka Teknik Utama or give up 9.74% of portfolio value over 90 days.

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

Bukaka Teknik Utama  vs.  Andalan Sakti Primaindo

Bukaka Teknik Utama

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bukaka Teknik Utama 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.

Andalan Sakti Primaindo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Andalan Sakti Primaindo 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.

Pair Trading with Bukaka Teknik and Andalan Sakti

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

The idea behind Bukaka Teknik Utama and Andalan Sakti Primaindo 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.

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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..