Correlation Between Bumi Resources and Bank BRISyariah
Can any of the company-specific risk be diversified away by investing in both Bumi Resources and Bank BRISyariah 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 Bank BRISyariah 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 Bank BRISyariah Tbk, you can compare the effects of market volatilities on Bumi Resources and Bank BRISyariah 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 Bank BRISyariah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bumi Resources and Bank BRISyariah.
Diversification Opportunities for Bumi Resources and Bank BRISyariah
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bumi and Bank is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Bumi Resources Tbk and Bank BRISyariah Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank BRISyariah 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 Tbk are associated (or correlated) with Bank BRISyariah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank BRISyariah Tbk has no effect on the direction of Bumi Resources i.e., Bumi Resources and Bank BRISyariah go up and down completely randomly.
Pair Corralation between Bumi Resources and Bank BRISyariah
Assuming the 90 days trading horizon Bumi Resources is expected to generate 1.47 times less return on investment than Bank BRISyariah. In addition to that, Bumi Resources is 1.43 times more volatile than Bank BRISyariah Tbk. It trades about 0.04 of its total potential returns per unit of risk. Bank BRISyariah Tbk is currently generating about 0.08 per unit of volatility. If you would invest 165,096 in Bank BRISyariah Tbk on September 2, 2024 and sell it today you would earn a total of 124,904 from holding Bank BRISyariah Tbk or generate 75.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bumi Resources Tbk vs. Bank BRISyariah Tbk
Performance |
| Timeline |
| Bumi Resources Tbk |
| Bank BRISyariah Tbk |
Bumi Resources and Bank BRISyariah Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bumi Resources and Bank BRISyariah
The main advantage of trading using opposite Bumi Resources and Bank BRISyariah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bumi Resources position performs unexpectedly, Bank BRISyariah 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 Bank BRISyariah will offset losses from the drop in Bank BRISyariah'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 |
| Bank BRISyariah vs. Ace Hardware Indonesia | Bank BRISyariah vs. Merdeka Copper Gold | Bank BRISyariah vs. Mitra Pinasthika Mustika | Bank BRISyariah vs. Jakarta Int Hotels |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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