Correlation Between Bumi Resources and Bukit Uluwatu
Can any of the company-specific risk be diversified away by investing in both Bumi Resources and Bukit Uluwatu 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 Bukit Uluwatu 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 Bukit Uluwatu Villa, you can compare the effects of market volatilities on Bumi Resources and Bukit Uluwatu 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 Bukit Uluwatu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bumi Resources and Bukit Uluwatu.
Diversification Opportunities for Bumi Resources and Bukit Uluwatu
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bumi and Bukit is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Bumi Resources Minerals and Bukit Uluwatu Villa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bukit Uluwatu Villa 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 Bukit Uluwatu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bukit Uluwatu Villa has no effect on the direction of Bumi Resources i.e., Bumi Resources and Bukit Uluwatu go up and down completely randomly.
Pair Corralation between Bumi Resources and Bukit Uluwatu
Assuming the 90 days trading horizon Bumi Resources Minerals is expected to generate 0.92 times more return on investment than Bukit Uluwatu. However, Bumi Resources Minerals is 1.08 times less risky than Bukit Uluwatu. It trades about 0.06 of its potential returns per unit of risk. Bukit Uluwatu Villa is currently generating about 0.06 per unit of risk. If you would invest 16,300 in Bumi Resources Minerals on November 19, 2024 and sell it today you would earn a total of 19,900 from holding Bumi Resources Minerals or generate 122.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Bumi Resources Minerals vs. Bukit Uluwatu Villa
Performance |
| Timeline |
| Bumi Resources Minerals |
| Bukit Uluwatu Villa |
Bumi Resources and Bukit Uluwatu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bumi Resources and Bukit Uluwatu
The main advantage of trading using opposite Bumi Resources and Bukit Uluwatu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bumi Resources position performs unexpectedly, Bukit Uluwatu 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 Bukit Uluwatu will offset losses from the drop in Bukit Uluwatu'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 |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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