Correlation Between Bumi Resources and PT Kusuma
Can any of the company-specific risk be diversified away by investing in both Bumi Resources and PT Kusuma 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 Kusuma 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 Kusuma Kemindo, you can compare the effects of market volatilities on Bumi Resources and PT Kusuma 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 Kusuma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bumi Resources and PT Kusuma.
Diversification Opportunities for Bumi Resources and PT Kusuma
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bumi and KKES is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Bumi Resources Tbk and PT Kusuma Kemindo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Kusuma Kemindo 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 Kusuma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Kusuma Kemindo has no effect on the direction of Bumi Resources i.e., Bumi Resources and PT Kusuma go up and down completely randomly.
Pair Corralation between Bumi Resources and PT Kusuma
Assuming the 90 days trading horizon Bumi Resources Tbk is expected to generate 1.12 times more return on investment than PT Kusuma. However, Bumi Resources is 1.12 times more volatile than PT Kusuma Kemindo. It trades about 0.01 of its potential returns per unit of risk. PT Kusuma Kemindo is currently generating about -0.05 per unit of risk. If you would invest 11,200 in Bumi Resources Tbk on November 28, 2024 and sell it today you would lose (1,000.00) from holding Bumi Resources Tbk or give up 8.93% 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. PT Kusuma Kemindo
Performance |
| Timeline |
| Bumi Resources Tbk |
| PT Kusuma Kemindo |
Bumi Resources and PT Kusuma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bumi Resources and PT Kusuma
The main advantage of trading using opposite Bumi Resources and PT Kusuma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bumi Resources position performs unexpectedly, PT Kusuma 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 Kusuma will offset losses from the drop in PT Kusuma'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 |
| PT Kusuma vs. PT Hetzer Medical | PT Kusuma vs. Bangun Karya Perkasa | PT Kusuma vs. PT Dewi Shri | PT Kusuma vs. PT Sari Kreasi |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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