Correlation Between Bumi Resources and Panorama Sentrawisata
Can any of the company-specific risk be diversified away by investing in both Bumi Resources and Panorama Sentrawisata 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 Panorama Sentrawisata 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 Panorama Sentrawisata Tbk, you can compare the effects of market volatilities on Bumi Resources and Panorama Sentrawisata 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 Panorama Sentrawisata. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bumi Resources and Panorama Sentrawisata.
Diversification Opportunities for Bumi Resources and Panorama Sentrawisata
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bumi and Panorama is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Bumi Resources Minerals and Panorama Sentrawisata Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panorama Sentrawisata Tbk 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 Panorama Sentrawisata. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panorama Sentrawisata Tbk has no effect on the direction of Bumi Resources i.e., Bumi Resources and Panorama Sentrawisata go up and down completely randomly.
Pair Corralation between Bumi Resources and Panorama Sentrawisata
Assuming the 90 days trading horizon Bumi Resources Minerals is expected to generate 4.49 times more return on investment than Panorama Sentrawisata. However, Bumi Resources is 4.49 times more volatile than Panorama Sentrawisata Tbk. It trades about 0.23 of its potential returns per unit of risk. Panorama Sentrawisata Tbk is currently generating about 0.21 per unit of risk. If you would invest 14,500 in Bumi Resources Minerals on August 25, 2024 and sell it today you would earn a total of 29,700 from holding Bumi Resources Minerals or generate 204.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bumi Resources Minerals vs. Panorama Sentrawisata Tbk
Performance |
| Timeline |
| Bumi Resources Minerals |
| Panorama Sentrawisata Tbk |
Bumi Resources and Panorama Sentrawisata Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bumi Resources and Panorama Sentrawisata
The main advantage of trading using opposite Bumi Resources and Panorama Sentrawisata positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bumi Resources position performs unexpectedly, Panorama Sentrawisata 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 Panorama Sentrawisata will offset losses from the drop in Panorama Sentrawisata'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 |
| Panorama Sentrawisata vs. Pembangunan Jaya Ancol | Panorama Sentrawisata vs. Hotel Sahid Jaya | Panorama Sentrawisata vs. Pioneerindo Gourmet International | Panorama Sentrawisata vs. Lautan Luas 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |