Correlation Between Bumi Resources and Estika Tata
Can any of the company-specific risk be diversified away by investing in both Bumi Resources and Estika Tata 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 Estika Tata 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 Estika Tata Tiara, you can compare the effects of market volatilities on Bumi Resources and Estika Tata 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 Estika Tata. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bumi Resources and Estika Tata.
Diversification Opportunities for Bumi Resources and Estika Tata
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bumi and Estika is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Bumi Resources Tbk and Estika Tata Tiara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Estika Tata Tiara 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 Estika Tata. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Estika Tata Tiara has no effect on the direction of Bumi Resources i.e., Bumi Resources and Estika Tata go up and down completely randomly.
Pair Corralation between Bumi Resources and Estika Tata
Assuming the 90 days trading horizon Bumi Resources Tbk is expected to under-perform the Estika Tata. In addition to that, Bumi Resources is 2.17 times more volatile than Estika Tata Tiara. It trades about -0.23 of its total potential returns per unit of risk. Estika Tata Tiara is currently generating about -0.05 per unit of volatility. If you would invest 12,000 in Estika Tata Tiara on November 28, 2024 and sell it today you would lose (200.00) from holding Estika Tata Tiara or give up 1.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bumi Resources Tbk vs. Estika Tata Tiara
Performance |
| Timeline |
| Bumi Resources Tbk |
| Estika Tata Tiara |
Bumi Resources and Estika Tata Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bumi Resources and Estika Tata
The main advantage of trading using opposite Bumi Resources and Estika Tata positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bumi Resources position performs unexpectedly, Estika Tata 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 Estika Tata will offset losses from the drop in Estika Tata's long position.| Bumi Resources vs. Aneka Tambang Persero | Bumi Resources vs. Timah Persero Tbk | Bumi Resources vs. Vale Indonesia Tbk | Bumi Resources vs. Energi Mega Persada |
| Estika Tata vs. PT Dewi Shri | Estika Tata vs. PT Hetzer Medical | Estika Tata vs. PT Pelayaran Nasional | Estika Tata vs. PT Cilacap Samudera |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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