Correlation Between Brera Holdings and PT Bumi
Can any of the company-specific risk be diversified away by investing in both Brera Holdings and PT Bumi 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 Brera Holdings and PT Bumi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brera Holdings PLC and PT Bumi Resources, you can compare the effects of market volatilities on Brera Holdings and PT Bumi 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 Brera Holdings with a short position of PT Bumi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brera Holdings and PT Bumi.
Diversification Opportunities for Brera Holdings and PT Bumi
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Brera and PBMRF is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Brera Holdings PLC and PT Bumi Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bumi Resources and Brera Holdings 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 Brera Holdings PLC are associated (or correlated) with PT Bumi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bumi Resources has no effect on the direction of Brera Holdings i.e., Brera Holdings and PT Bumi go up and down completely randomly.
Pair Corralation between Brera Holdings and PT Bumi
Given the investment horizon of 90 days Brera Holdings is expected to generate 83.83 times less return on investment than PT Bumi. But when comparing it to its historical volatility, Brera Holdings PLC is 4.99 times less risky than PT Bumi. It trades about 0.0 of its potential returns per unit of risk. PT Bumi Resources is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1.00 in PT Bumi Resources on September 3, 2024 and sell it today you would lose (0.40) from holding PT Bumi Resources or give up 40.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 93.95% |
| Values | Daily Returns |
Brera Holdings PLC vs. PT Bumi Resources
Performance |
| Timeline |
| Brera Holdings PLC |
| PT Bumi Resources |
Brera Holdings and PT Bumi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brera Holdings and PT Bumi
The main advantage of trading using opposite Brera Holdings and PT Bumi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brera Holdings position performs unexpectedly, PT Bumi 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 Bumi will offset losses from the drop in PT Bumi's long position.| Brera Holdings vs. Reading International B | Brera Holdings vs. Marcus | Brera Holdings vs. Reading International | Brera Holdings vs. LiveOne |
| PT Bumi vs. Morien Resources Corp | PT Bumi vs. Adaro Energy Tbk | PT Bumi vs. Alliance Resource Partners | PT Bumi vs. Brera Holdings PLC |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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