Correlation Between Sumber Energi and Bakrieland Development

Can any of the company-specific risk be diversified away by investing in both Sumber Energi and Bakrieland Development 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 Sumber Energi and Bakrieland Development into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sumber Energi Andalan and Bakrieland Development Tbk, you can compare the effects of market volatilities on Sumber Energi and Bakrieland Development 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 Sumber Energi with a short position of Bakrieland Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumber Energi and Bakrieland Development.

Diversification Opportunities for Sumber Energi and Bakrieland Development

0.08

Correlation Coefficient

Sumber Energi  Bakrieland Development

Significant diversification

The 3 months correlation between Sumber and Bakrieland is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Sumber Energi Andalan and Bakrieland Development Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bakrieland Development and Sumber Energi 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 Sumber Energi Andalan are associated (or correlated) with Bakrieland Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bakrieland Development has no effect on the direction of Sumber Energi i.e., Sumber Energi and Bakrieland Development go up and down completely randomly.

Pair Corralation between Sumber Energi and Bakrieland Development

Assuming the 90 days trading horizon Sumber Energi Andalan is expected to under-perform the Bakrieland Development. But the stock apears to be less risky and, when comparing its historical volatility, Sumber Energi Andalan is 1.98 times less risky than Bakrieland Development. The stock trades about -0.05 of its potential returns per unit of risk. The Bakrieland Development Tbk is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,000.00  in Bakrieland Development Tbk on April 25, 2025 and sell it today you would earn a total of  0.00  from holding Bakrieland Development Tbk or generate 0.0% return on investment over 90 days.

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

Sumber Energi Andalan  vs.  Bakrieland Development Tbk

Sumber Energi Andalan

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sumber Energi Andalan 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.

Bakrieland Development

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bakrieland Development Tbk are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Bakrieland Development may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Sumber Energi and Bakrieland Development

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

The idea behind Sumber Energi Andalan and Bakrieland Development Tbk 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..