Correlation Between Widodo Makmur and PT Bukalapak

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

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

Diversification Opportunities for Widodo Makmur and PT Bukalapak

0.0

Correlation Coefficient

Widodo Makmur  PT Bukalapak

Pay attention - limited upside

The 3 months correlation between Widodo and BUKA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Widodo Makmur Perkasa and PT Bukalapak in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bukalapak and Widodo Makmur 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 Widodo Makmur Perkasa 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 Widodo Makmur i.e., Widodo Makmur and PT Bukalapak go up and down completely randomly.

Pair Corralation between Widodo Makmur and PT Bukalapak

If you would invest  11,500  in PT Bukalapak on September 19, 2024 and sell it today you would earn a total of  900.00  from holding PT Bukalapak or generate 7.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Widodo Makmur Perkasa  vs.  PT Bukalapak

Widodo Makmur Perkasa

Risk-Adjusted Performance

0 of 100

Very Weak

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

The main advantage of trading using opposite Widodo Makmur and PT Bukalapak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Widodo Makmur 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 Widodo Makmur Perkasa 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.