Correlation Between PT Bumi and Ito En
Can any of the company-specific risk be diversified away by investing in both PT Bumi and Ito En 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 Ito En 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 Ito En, you can compare the effects of market volatilities on PT Bumi and Ito En 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 Ito En. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bumi and Ito En.
Diversification Opportunities for PT Bumi and Ito En
Pay attention - limited upside
The 3 months correlation between PBMRF and Ito is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding PT Bumi Resources and Ito En in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ito En 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 Ito En. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ito En has no effect on the direction of PT Bumi i.e., PT Bumi and Ito En go up and down completely randomly.
Pair Corralation between PT Bumi and Ito En
Assuming the 90 days horizon PT Bumi Resources is expected to generate 25.54 times more return on investment than Ito En. However, PT Bumi is 25.54 times more volatile than Ito En. It trades about 0.05 of its potential returns per unit of risk. Ito En is currently generating about -0.06 per unit of risk. If you would invest 1.00 in PT Bumi Resources on September 2, 2024 and sell it today you would lose (0.40) from holding PT Bumi Resources or give up 40.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 80.89% |
| Values | Daily Returns |
PT Bumi Resources vs. Ito En
Performance |
| Timeline |
| PT Bumi Resources |
| Ito En |
PT Bumi and Ito En Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bumi and Ito En
The main advantage of trading using opposite PT Bumi and Ito En positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bumi position performs unexpectedly, Ito En 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 Ito En will offset losses from the drop in Ito En's long position.The idea behind PT Bumi Resources and Ito En pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Ito En vs. PepsiCo | Ito En vs. Coca Cola Consolidated | Ito En vs. Monster Beverage Corp | Ito En vs. Celsius Holdings |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |