Correlation Between Bumi Resources and Semen Baturaja
Can any of the company-specific risk be diversified away by investing in both Bumi Resources and Semen Baturaja 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 Semen Baturaja 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 Semen Baturaja Persero, you can compare the effects of market volatilities on Bumi Resources and Semen Baturaja 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 Semen Baturaja. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bumi Resources and Semen Baturaja.
Diversification Opportunities for Bumi Resources and Semen Baturaja
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bumi and Semen is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Bumi Resources Tbk and Semen Baturaja Persero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semen Baturaja Persero 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 Semen Baturaja. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semen Baturaja Persero has no effect on the direction of Bumi Resources i.e., Bumi Resources and Semen Baturaja go up and down completely randomly.
Pair Corralation between Bumi Resources and Semen Baturaja
Assuming the 90 days trading horizon Bumi Resources Tbk is expected to generate 1.57 times more return on investment than Semen Baturaja. However, Bumi Resources is 1.57 times more volatile than Semen Baturaja Persero. It trades about 0.11 of its potential returns per unit of risk. Semen Baturaja Persero is currently generating about 0.03 per unit of risk. If you would invest 8,900 in Bumi Resources Tbk on September 1, 2024 and sell it today you would earn a total of 5,800 from holding Bumi Resources Tbk or generate 65.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Bumi Resources Tbk vs. Semen Baturaja Persero
Performance |
| Timeline |
| Bumi Resources Tbk |
| Semen Baturaja Persero |
Bumi Resources and Semen Baturaja Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bumi Resources and Semen Baturaja
The main advantage of trading using opposite Bumi Resources and Semen Baturaja positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bumi Resources position performs unexpectedly, Semen Baturaja 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 Semen Baturaja will offset losses from the drop in Semen Baturaja'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 |
| Semen Baturaja vs. Wijaya Karya Beton | Semen Baturaja vs. PP Properti Tbk | Semen Baturaja vs. Pembangunan Perumahan PT | Semen Baturaja vs. Waskita Karya Persero |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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