Correlation Between Bisi International and Harum Energy
Can any of the company-specific risk be diversified away by investing in both Bisi International and Harum Energy 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 Bisi International and Harum Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bisi International Tbk and Harum Energy Tbk, you can compare the effects of market volatilities on Bisi International and Harum Energy 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 Bisi International with a short position of Harum Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bisi International and Harum Energy.
Diversification Opportunities for Bisi International and Harum Energy
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bisi and Harum is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Bisi International Tbk and Harum Energy Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harum Energy Tbk and Bisi International 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 Bisi International Tbk are associated (or correlated) with Harum Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harum Energy Tbk has no effect on the direction of Bisi International i.e., Bisi International and Harum Energy go up and down completely randomly.
Pair Corralation between Bisi International and Harum Energy
Assuming the 90 days trading horizon Bisi International Tbk is expected to generate 0.81 times more return on investment than Harum Energy. However, Bisi International Tbk is 1.24 times less risky than Harum Energy. It trades about 0.02 of its potential returns per unit of risk. Harum Energy Tbk is currently generating about -0.47 per unit of risk. If you would invest 109,500 in Bisi International Tbk on November 2, 2024 and sell it today you would earn a total of 500.00 from holding Bisi International Tbk or generate 0.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Bisi International Tbk vs. Harum Energy Tbk
Performance |
| Timeline |
| Bisi International Tbk |
| Harum Energy Tbk |
Bisi International and Harum Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bisi International and Harum Energy
The main advantage of trading using opposite Bisi International and Harum Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bisi International position performs unexpectedly, Harum Energy 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 Harum Energy will offset losses from the drop in Harum Energy's long position.| Bisi International vs. Sampoerna Agro Tbk | Bisi International vs. Bakrie Sumatera Plantations | Bisi International vs. Tunas Baru Lampung | Bisi International vs. Darma Henwa Tbk |
| Harum Energy vs. Indo Tambangraya Megah | Harum Energy vs. Indika Energy Tbk | Harum Energy vs. Adaro Energy Tbk | Harum Energy vs. Akr Corporindo Tbk |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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