Correlation Between Jakarta Int and Bumi Resources
Can any of the company-specific risk be diversified away by investing in both Jakarta Int and Bumi Resources 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 Jakarta Int and Bumi Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jakarta Int Hotels and Bumi Resources Tbk, you can compare the effects of market volatilities on Jakarta Int and Bumi Resources 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 Jakarta Int with a short position of Bumi Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jakarta Int and Bumi Resources.
Diversification Opportunities for Jakarta Int and Bumi Resources
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jakarta and Bumi is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Jakarta Int Hotels and Bumi Resources Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bumi Resources Tbk and Jakarta Int 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 Jakarta Int Hotels are associated (or correlated) with Bumi Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bumi Resources Tbk has no effect on the direction of Jakarta Int i.e., Jakarta Int and Bumi Resources go up and down completely randomly.
Pair Corralation between Jakarta Int and Bumi Resources
Assuming the 90 days trading horizon Jakarta Int Hotels is expected to generate 1.2 times more return on investment than Bumi Resources. However, Jakarta Int is 1.2 times more volatile than Bumi Resources Tbk. It trades about 0.12 of its potential returns per unit of risk. Bumi Resources Tbk is currently generating about 0.0 per unit of risk. If you would invest 35,800 in Jakarta Int Hotels on September 3, 2024 and sell it today you would earn a total of 209,200 from holding Jakarta Int Hotels or generate 584.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Jakarta Int Hotels vs. Bumi Resources Tbk
Performance |
| Timeline |
| Jakarta Int Hotels |
| Bumi Resources Tbk |
Jakarta Int and Bumi Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jakarta Int and Bumi Resources
The main advantage of trading using opposite Jakarta Int and Bumi Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jakarta Int position performs unexpectedly, Bumi Resources 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 Bumi Resources will offset losses from the drop in Bumi Resources' long position.| Jakarta Int vs. Mitra Pinasthika Mustika | Jakarta Int vs. Asuransi Harta Aman | Jakarta Int vs. Indosterling Technomedia Tbk | Jakarta Int vs. Indosat Tbk |
| Bumi Resources vs. Weha Transportasi Indonesia | Bumi Resources vs. Mitra Pinasthika Mustika | Bumi Resources vs. Jakarta Int Hotels | Bumi Resources vs. Asuransi Harta Aman |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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