Correlation Between PT Bumi and HeadsUp Entertainment
Can any of the company-specific risk be diversified away by investing in both PT Bumi and HeadsUp Entertainment 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 PT Bumi and HeadsUp Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Bumi Resources and HeadsUp Entertainment International, you can compare the effects of market volatilities on PT Bumi and HeadsUp Entertainment 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 PT Bumi with a short position of HeadsUp Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bumi and HeadsUp Entertainment.
Diversification Opportunities for PT Bumi and HeadsUp Entertainment
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PBMRF and HeadsUp is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding PT Bumi Resources and HeadsUp Entertainment Internat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HeadsUp Entertainment and PT Bumi 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 PT Bumi Resources are associated (or correlated) with HeadsUp Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HeadsUp Entertainment has no effect on the direction of PT Bumi i.e., PT Bumi and HeadsUp Entertainment go up and down completely randomly.
Pair Corralation between PT Bumi and HeadsUp Entertainment
Assuming the 90 days horizon PT Bumi is expected to generate 1.01 times less return on investment than HeadsUp Entertainment. In addition to that, PT Bumi is 1.43 times more volatile than HeadsUp Entertainment International. It trades about 0.05 of its total potential returns per unit of risk. HeadsUp Entertainment International is currently generating about 0.07 per unit of volatility. If you would invest 0.64 in HeadsUp Entertainment International on August 29, 2024 and sell it today you would earn a total of 0.01 from holding HeadsUp Entertainment International or generate 1.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bumi Resources vs. HeadsUp Entertainment Internat
Performance |
| Timeline |
| PT Bumi Resources |
| HeadsUp Entertainment |
PT Bumi and HeadsUp Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bumi and HeadsUp Entertainment
The main advantage of trading using opposite PT Bumi and HeadsUp Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bumi position performs unexpectedly, HeadsUp Entertainment 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 HeadsUp Entertainment will offset losses from the drop in HeadsUp Entertainment's long position.| PT Bumi vs. Adaro Energy Tbk | PT Bumi vs. Bukit Asam Tbk | PT Bumi vs. Indo Tambangraya Megah | PT Bumi vs. Yanzhou Coal Mining |
| HeadsUp Entertainment vs. Universal Media Group | HeadsUp Entertainment vs. QYOU Media | HeadsUp Entertainment vs. Ggtoor Inc | HeadsUp Entertainment vs. Pop Culture Group |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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