Correlation Between Pembina Pipeline and PT Bumi
Can any of the company-specific risk be diversified away by investing in both Pembina Pipeline 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 Pembina Pipeline and PT Bumi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pembina Pipeline Corp and PT Bumi Resources, you can compare the effects of market volatilities on Pembina Pipeline 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 Pembina Pipeline with a short position of PT Bumi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembina Pipeline and PT Bumi.
Diversification Opportunities for Pembina Pipeline and PT Bumi
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pembina and PJM is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Pembina Pipeline Corp 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 Pembina Pipeline 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 Pembina Pipeline Corp 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 Pembina Pipeline i.e., Pembina Pipeline and PT Bumi go up and down completely randomly.
Pair Corralation between Pembina Pipeline and PT Bumi
Assuming the 90 days horizon Pembina Pipeline Corp is expected to generate 0.15 times more return on investment than PT Bumi. However, Pembina Pipeline Corp is 6.83 times less risky than PT Bumi. It trades about 0.26 of its potential returns per unit of risk. PT Bumi Resources is currently generating about 0.03 per unit of risk. If you would invest 3,435 in Pembina Pipeline Corp on October 20, 2024 and sell it today you would earn a total of 166.00 from holding Pembina Pipeline Corp or generate 4.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pembina Pipeline Corp vs. PT Bumi Resources
Performance |
| Timeline |
| Pembina Pipeline Corp |
| PT Bumi Resources |
Pembina Pipeline and PT Bumi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pembina Pipeline and PT Bumi
The main advantage of trading using opposite Pembina Pipeline and PT Bumi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pembina Pipeline 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.| Pembina Pipeline vs. Broadridge Financial Solutions | Pembina Pipeline vs. NAGOYA RAILROAD | Pembina Pipeline vs. Yuexiu Transport Infrastructure | Pembina Pipeline vs. BROADWIND ENRGY |
| PT Bumi vs. GigaMedia | PT Bumi vs. VARIOUS EATERIES LS | PT Bumi vs. Boyd Gaming | PT Bumi vs. STORE ELECTRONIC |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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