Correlation Between Bumi Resources and MAP Aktif
Can any of the company-specific risk be diversified away by investing in both Bumi Resources and MAP Aktif 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 MAP Aktif 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 MAP Aktif Adiperkasa, you can compare the effects of market volatilities on Bumi Resources and MAP Aktif 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 MAP Aktif. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bumi Resources and MAP Aktif.
Diversification Opportunities for Bumi Resources and MAP Aktif
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bumi and MAP is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Bumi Resources Minerals and MAP Aktif Adiperkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAP Aktif Adiperkasa 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 MAP Aktif. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAP Aktif Adiperkasa has no effect on the direction of Bumi Resources i.e., Bumi Resources and MAP Aktif go up and down completely randomly.
Pair Corralation between Bumi Resources and MAP Aktif
Assuming the 90 days trading horizon Bumi Resources Minerals is expected to generate 1.54 times more return on investment than MAP Aktif. However, Bumi Resources is 1.54 times more volatile than MAP Aktif Adiperkasa. It trades about 0.1 of its potential returns per unit of risk. MAP Aktif Adiperkasa is currently generating about 0.11 per unit of risk. If you would invest 37,400 in Bumi Resources Minerals on August 29, 2024 and sell it today you would earn a total of 3,600 from holding Bumi Resources Minerals or generate 9.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bumi Resources Minerals vs. MAP Aktif Adiperkasa
Performance |
| Timeline |
| Bumi Resources Minerals |
| MAP Aktif Adiperkasa |
Bumi Resources and MAP Aktif Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bumi Resources and MAP Aktif
The main advantage of trading using opposite Bumi Resources and MAP Aktif positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bumi Resources position performs unexpectedly, MAP Aktif 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 MAP Aktif will offset losses from the drop in MAP Aktif'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 |
| MAP Aktif vs. Mitra Adiperkasa Tbk | MAP Aktif vs. Map Boga Adiperkasa | MAP Aktif vs. Mitra Keluarga Karyasehat | MAP Aktif vs. Medikaloka Hermina PT |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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