Correlation Between CNVISION MEDIA and PT Bumi
Can any of the company-specific risk be diversified away by investing in both CNVISION MEDIA and PT Bumi 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 CNVISION MEDIA and PT Bumi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CNVISION MEDIA and PT Bumi Resources, you can compare the effects of market volatilities on CNVISION MEDIA and PT Bumi 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 CNVISION MEDIA with a short position of PT Bumi. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNVISION MEDIA and PT Bumi.
Diversification Opportunities for CNVISION MEDIA and PT Bumi
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CNVISION and PJM is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding CNVISION MEDIA and PT Bumi Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bumi Resources and CNVISION MEDIA 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 CNVISION MEDIA are associated (or correlated) with PT Bumi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bumi Resources has no effect on the direction of CNVISION MEDIA i.e., CNVISION MEDIA and PT Bumi go up and down completely randomly.
Pair Corralation between CNVISION MEDIA and PT Bumi
Assuming the 90 days trading horizon CNVISION MEDIA is expected to generate 5.66 times less return on investment than PT Bumi. But when comparing it to its historical volatility, CNVISION MEDIA is 2.3 times less risky than PT Bumi. It trades about 0.02 of its potential returns per unit of risk. PT Bumi Resources is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 0.60 in PT Bumi Resources on September 1, 2024 and sell it today you would earn a total of 0.20 from holding PT Bumi Resources or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CNVISION MEDIA vs. PT Bumi Resources
Performance |
| Timeline |
| CNVISION MEDIA |
| PT Bumi Resources |
CNVISION MEDIA and PT Bumi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNVISION MEDIA and PT Bumi
The main advantage of trading using opposite CNVISION MEDIA and PT Bumi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNVISION MEDIA position performs unexpectedly, PT Bumi 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 Bumi will offset losses from the drop in PT Bumi's long position.| CNVISION MEDIA vs. SIVERS SEMICONDUCTORS AB | CNVISION MEDIA vs. Darden Restaurants | CNVISION MEDIA vs. Reliance Steel Aluminum | CNVISION MEDIA vs. Q2M Managementberatung AG |
| PT Bumi vs. ACCSYS TECHPLC EO | PT Bumi vs. VIAPLAY GROUP AB | PT Bumi vs. NetSol Technologies | PT Bumi vs. TRAVEL LEISURE DL 01 |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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