Correlation Between Geo Energy and PT Bumi
Can any of the company-specific risk be diversified away by investing in both Geo Energy 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 Geo Energy and PT Bumi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geo Energy Resources and PT Bumi Resources, you can compare the effects of market volatilities on Geo Energy 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 Geo Energy with a short position of PT Bumi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geo Energy and PT Bumi.
Diversification Opportunities for Geo Energy and PT Bumi
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Geo and PBMRF is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Geo Energy Resources 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 Geo Energy 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 Geo Energy Resources 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 Geo Energy i.e., Geo Energy and PT Bumi go up and down completely randomly.
Pair Corralation between Geo Energy and PT Bumi
If you would invest 0.60 in PT Bumi Resources on September 3, 2024 and sell it today you would earn a total of 0.00 from holding PT Bumi Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geo Energy Resources vs. PT Bumi Resources
Performance |
| Timeline |
| Geo Energy Resources |
| PT Bumi Resources |
Geo Energy and PT Bumi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geo Energy and PT Bumi
The main advantage of trading using opposite Geo Energy and PT Bumi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geo Energy 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.| Geo Energy vs. Yanzhou Coal Mining | Geo Energy vs. Indo Tambangraya Megah | Geo Energy vs. Bukit Asam Tbk | Geo Energy vs. Thungela Resources Limited |
| PT Bumi vs. Morien Resources Corp | PT Bumi vs. Adaro Energy Tbk | PT Bumi vs. Alliance Resource Partners | PT Bumi vs. Brera Holdings PLC |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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