Correlation Between Mitrabahtera Segara and Bumi Resources
Can any of the company-specific risk be diversified away by investing in both Mitrabahtera Segara 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 Mitrabahtera Segara and Bumi Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitrabahtera Segara Sejati and Bumi Resources Tbk, you can compare the effects of market volatilities on Mitrabahtera Segara 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 Mitrabahtera Segara with a short position of Bumi Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitrabahtera Segara and Bumi Resources.
Diversification Opportunities for Mitrabahtera Segara and Bumi Resources
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mitrabahtera and Bumi is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Mitrabahtera Segara Sejati 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 Mitrabahtera Segara 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 Mitrabahtera Segara Sejati 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 Mitrabahtera Segara i.e., Mitrabahtera Segara and Bumi Resources go up and down completely randomly.
Pair Corralation between Mitrabahtera Segara and Bumi Resources
Assuming the 90 days trading horizon Mitrabahtera Segara Sejati is expected to under-perform the Bumi Resources. But the stock apears to be less risky and, when comparing its historical volatility, Mitrabahtera Segara Sejati is 3.19 times less risky than Bumi Resources. The stock trades about -0.18 of its potential returns per unit of risk. The Bumi Resources Tbk is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 13,500 in Bumi Resources Tbk on September 3, 2024 and sell it today you would earn a total of 1,200 from holding Bumi Resources Tbk or generate 8.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitrabahtera Segara Sejati vs. Bumi Resources Tbk
Performance |
| Timeline |
| Mitrabahtera Segara |
| Bumi Resources Tbk |
Mitrabahtera Segara and Bumi Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitrabahtera Segara and Bumi Resources
The main advantage of trading using opposite Mitrabahtera Segara and Bumi Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitrabahtera Segara 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.| Mitrabahtera Segara vs. Petrosea Tbk | Mitrabahtera Segara vs. Samudera Indonesia Tbk | Mitrabahtera Segara vs. Soechi Lines Tbk | Mitrabahtera Segara vs. Wintermar Offshore Marine |
| 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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