Correlation Between Bumi Resources and Bank Mestika
Can any of the company-specific risk be diversified away by investing in both Bumi Resources and Bank Mestika 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 Resources and Bank Mestika into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bumi Resources Minerals and Bank Mestika Dharma, you can compare the effects of market volatilities on Bumi Resources and Bank Mestika 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 Resources with a short position of Bank Mestika. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bumi Resources and Bank Mestika.
Diversification Opportunities for Bumi Resources and Bank Mestika
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bumi and Bank is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Bumi Resources Minerals and Bank Mestika Dharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Mestika Dharma and Bumi Resources 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 Resources Minerals are associated (or correlated) with Bank Mestika. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Mestika Dharma has no effect on the direction of Bumi Resources i.e., Bumi Resources and Bank Mestika go up and down completely randomly.
Pair Corralation between Bumi Resources and Bank Mestika
Assuming the 90 days trading horizon Bumi Resources Minerals is expected to generate 3.12 times more return on investment than Bank Mestika. However, Bumi Resources is 3.12 times more volatile than Bank Mestika Dharma. It trades about 0.12 of its potential returns per unit of risk. Bank Mestika Dharma is currently generating about 0.09 per unit of risk. If you would invest 36,800 in Bumi Resources Minerals on September 1, 2024 and sell it today you would earn a total of 4,600 from holding Bumi Resources Minerals or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bumi Resources Minerals vs. Bank Mestika Dharma
Performance |
| Timeline |
| Bumi Resources Minerals |
| Bank Mestika Dharma |
Bumi Resources and Bank Mestika Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bumi Resources and Bank Mestika
The main advantage of trading using opposite Bumi Resources and Bank Mestika positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bumi Resources position performs unexpectedly, Bank Mestika 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 Bank Mestika will offset losses from the drop in Bank Mestika's long position.| Bumi Resources vs. Energi Mega Persada | Bumi Resources vs. Harum Energy Tbk | Bumi Resources vs. Delta Dunia Makmur | Bumi Resources vs. Benakat Petroleum Energy |
| Bank Mestika vs. Bank Maspion Indonesia | Bank Mestika vs. Bank Sinarmas Tbk | Bank Mestika vs. Bank Ina Perdana | Bank Mestika vs. Bank Bumi Arta |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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