Correlation Between Nusa Raya and Bumi Benowo
Can any of the company-specific risk be diversified away by investing in both Nusa Raya and Bumi Benowo 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 Nusa Raya and Bumi Benowo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nusa Raya Cipta and Bumi Benowo Sukses, you can compare the effects of market volatilities on Nusa Raya and Bumi Benowo 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 Nusa Raya with a short position of Bumi Benowo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nusa Raya and Bumi Benowo.
Diversification Opportunities for Nusa Raya and Bumi Benowo
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nusa and Bumi is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Nusa Raya Cipta and Bumi Benowo Sukses in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bumi Benowo Sukses and Nusa Raya 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 Nusa Raya Cipta are associated (or correlated) with Bumi Benowo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bumi Benowo Sukses has no effect on the direction of Nusa Raya i.e., Nusa Raya and Bumi Benowo go up and down completely randomly.
Pair Corralation between Nusa Raya and Bumi Benowo
Assuming the 90 days trading horizon Nusa Raya is expected to generate 6.57 times less return on investment than Bumi Benowo. But when comparing it to its historical volatility, Nusa Raya Cipta is 3.25 times less risky than Bumi Benowo. It trades about 0.04 of its potential returns per unit of risk. Bumi Benowo Sukses is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 7,000 in Bumi Benowo Sukses on January 15, 2025 and sell it today you would earn a total of 14,600 from holding Bumi Benowo Sukses or generate 208.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nusa Raya Cipta vs. Bumi Benowo Sukses
Performance |
| Timeline |
| Nusa Raya Cipta |
| Bumi Benowo Sukses |
Nusa Raya and Bumi Benowo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nusa Raya and Bumi Benowo
The main advantage of trading using opposite Nusa Raya and Bumi Benowo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nusa Raya position performs unexpectedly, Bumi Benowo 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 Benowo will offset losses from the drop in Bumi Benowo's long position.| Nusa Raya vs. Total Bangun Persada | Nusa Raya vs. Surya Semesta Internusa | Nusa Raya vs. Acset Indonusa Tbk | Nusa Raya vs. Mitra Pinasthika Mustika |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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