Correlation Between Indo Tambangraya and PT Bumi
Can any of the company-specific risk be diversified away by investing in both Indo Tambangraya 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 Indo Tambangraya and PT Bumi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indo Tambangraya Megah and PT Bumi Resources, you can compare the effects of market volatilities on Indo Tambangraya 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 Indo Tambangraya with a short position of PT Bumi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indo Tambangraya and PT Bumi.
Diversification Opportunities for Indo Tambangraya and PT Bumi
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Indo and PBMRF is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Indo Tambangraya Megah 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 Indo Tambangraya 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 Indo Tambangraya Megah 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 Indo Tambangraya i.e., Indo Tambangraya and PT Bumi go up and down completely randomly.
Pair Corralation between Indo Tambangraya and PT Bumi
Assuming the 90 days horizon Indo Tambangraya Megah is expected to generate 0.29 times more return on investment than PT Bumi. However, Indo Tambangraya Megah is 3.5 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 0.0 per unit of risk. If you would invest 297.00 in Indo Tambangraya Megah on August 29, 2024 and sell it today you would earn a total of 4.00 from holding Indo Tambangraya Megah or generate 1.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indo Tambangraya Megah vs. PT Bumi Resources
Performance |
| Timeline |
| Indo Tambangraya Megah |
| PT Bumi Resources |
Indo Tambangraya and PT Bumi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indo Tambangraya and PT Bumi
The main advantage of trading using opposite Indo Tambangraya and PT Bumi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indo Tambangraya 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.| Indo Tambangraya vs. Bukit Asam Tbk | Indo Tambangraya vs. Adaro Energy Tbk | Indo Tambangraya vs. Geo Energy Resources | Indo Tambangraya vs. Yanzhou Coal Mining |
| PT Bumi vs. Adaro Energy Tbk | PT Bumi vs. Bukit Asam Tbk | PT Bumi vs. Indo Tambangraya Megah | PT Bumi vs. Yanzhou Coal Mining |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |