Correlation Between Bumi Benowo and Bhakti Multi
Can any of the company-specific risk be diversified away by investing in both Bumi Benowo and Bhakti Multi 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 Bumi Benowo and Bhakti Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bumi Benowo Sukses and Bhakti Multi Artha, you can compare the effects of market volatilities on Bumi Benowo and Bhakti Multi 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 Bumi Benowo with a short position of Bhakti Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bumi Benowo and Bhakti Multi.
Diversification Opportunities for Bumi Benowo and Bhakti Multi
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bumi and Bhakti is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Bumi Benowo Sukses and Bhakti Multi Artha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bhakti Multi Artha and Bumi Benowo 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 Bumi Benowo Sukses are associated (or correlated) with Bhakti Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bhakti Multi Artha has no effect on the direction of Bumi Benowo i.e., Bumi Benowo and Bhakti Multi go up and down completely randomly.
Pair Corralation between Bumi Benowo and Bhakti Multi
Assuming the 90 days trading horizon Bumi Benowo Sukses is expected to generate 1.74 times more return on investment than Bhakti Multi. However, Bumi Benowo is 1.74 times more volatile than Bhakti Multi Artha. It trades about -0.11 of its potential returns per unit of risk. Bhakti Multi Artha is currently generating about -0.35 per unit of risk. If you would invest 22,200 in Bumi Benowo Sukses on August 28, 2024 and sell it today you would lose (2,000) from holding Bumi Benowo Sukses or give up 9.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bumi Benowo Sukses vs. Bhakti Multi Artha
Performance |
| Timeline |
| Bumi Benowo Sukses |
| Bhakti Multi Artha |
Bumi Benowo and Bhakti Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bumi Benowo and Bhakti Multi
The main advantage of trading using opposite Bumi Benowo and Bhakti Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bumi Benowo position performs unexpectedly, Bhakti Multi 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 Bhakti Multi will offset losses from the drop in Bhakti Multi's long position.| Bumi Benowo vs. Indo Kordsa Tbk | Bumi Benowo vs. Wilmar Cahaya Indonesia | Bumi Benowo vs. Citra Marga Nusaphala | Bumi Benowo vs. Darya Varia Laboratoria Tbk |
| Bhakti Multi vs. Metro Healthcare Indonesia | Bhakti Multi vs. Bintang Oto Global | Bhakti Multi vs. Surya Permata Andalan | Bhakti Multi vs. Capital Financial Indonesia |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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