Correlation Between PARKEN Sport and PT Bumi
Can any of the company-specific risk be diversified away by investing in both PARKEN Sport 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 PARKEN Sport and PT Bumi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PARKEN Sport Entertainment and PT Bumi Resources, you can compare the effects of market volatilities on PARKEN Sport 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 PARKEN Sport with a short position of PT Bumi. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARKEN Sport and PT Bumi.
Diversification Opportunities for PARKEN Sport and PT Bumi
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PARKEN and PJM is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment 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 PARKEN Sport 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 PARKEN Sport Entertainment 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 PARKEN Sport i.e., PARKEN Sport and PT Bumi go up and down completely randomly.
Pair Corralation between PARKEN Sport and PT Bumi
Assuming the 90 days horizon PARKEN Sport Entertainment is expected to generate 0.56 times more return on investment than PT Bumi. However, PARKEN Sport Entertainment is 1.79 times less risky than PT Bumi. It trades about 0.13 of its potential returns per unit of risk. PT Bumi Resources is currently generating about -0.13 per unit of risk. If you would invest 1,590 in PARKEN Sport Entertainment on September 14, 2024 and sell it today you would earn a total of 85.00 from holding PARKEN Sport Entertainment or generate 5.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PARKEN Sport Entertainment vs. PT Bumi Resources
Performance |
| Timeline |
| PARKEN Sport Enterta |
| PT Bumi Resources |
PARKEN Sport and PT Bumi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PARKEN Sport and PT Bumi
The main advantage of trading using opposite PARKEN Sport and PT Bumi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PARKEN Sport 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.| PARKEN Sport vs. The Walt Disney | PARKEN Sport vs. Charter Communications | PARKEN Sport vs. Warner Music Group | PARKEN Sport vs. Superior Plus Corp |
| PT Bumi vs. Pembina Pipeline Corp | PT Bumi vs. AUSTEVOLL SEAFOOD | PT Bumi vs. HF FOODS GRP | PT Bumi vs. PARKEN Sport Entertainment |
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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