Correlation Between Bumi Resources and PT Bank
Can any of the company-specific risk be diversified away by investing in both Bumi Resources and PT Bank 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 PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bumi Resources Tbk and PT Bank Bisnis, you can compare the effects of market volatilities on Bumi Resources and PT Bank 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 PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bumi Resources and PT Bank.
Diversification Opportunities for Bumi Resources and PT Bank
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bumi and BBSI is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Bumi Resources Tbk and PT Bank Bisnis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Bisnis 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 Tbk are associated (or correlated) with PT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Bisnis has no effect on the direction of Bumi Resources i.e., Bumi Resources and PT Bank go up and down completely randomly.
Pair Corralation between Bumi Resources and PT Bank
Assuming the 90 days trading horizon Bumi Resources is expected to generate 2.05 times less return on investment than PT Bank. In addition to that, Bumi Resources is 1.08 times more volatile than PT Bank Bisnis. It trades about 0.02 of its total potential returns per unit of risk. PT Bank Bisnis is currently generating about 0.04 per unit of volatility. If you would invest 285,000 in PT Bank Bisnis on September 1, 2024 and sell it today you would earn a total of 135,000 from holding PT Bank Bisnis or generate 47.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.77% |
| Values | Daily Returns |
Bumi Resources Tbk vs. PT Bank Bisnis
Performance |
| Timeline |
| Bumi Resources Tbk |
| PT Bank Bisnis |
Bumi Resources and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bumi Resources and PT Bank
The main advantage of trading using opposite Bumi Resources and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bumi Resources position performs unexpectedly, PT Bank 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 Bank will offset losses from the drop in PT Bank's long position.| Bumi Resources vs. Mitrabahtera Segara Sejati | Bumi Resources vs. Weha Transportasi Indonesia | Bumi Resources vs. Rig Tenders Tbk | Bumi Resources vs. Rukun Raharja Tbk |
| PT Bank vs. Bk Harda Internasional | PT Bank vs. Bank Yudha Bhakti | PT Bank vs. Bank Net Indonesia | PT Bank vs. Bank Amar Indonesia |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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