Correlation Between PT Bumi and SYN Prop
Can any of the company-specific risk be diversified away by investing in both PT Bumi and SYN Prop 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 SYN Prop 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 SYN prop e, you can compare the effects of market volatilities on PT Bumi and SYN Prop 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 SYN Prop. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bumi and SYN Prop.
Diversification Opportunities for PT Bumi and SYN Prop
Pay attention - limited upside
The 3 months correlation between PBMRF and SYN is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding PT Bumi Resources and SYN prop e in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SYN prop e 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 SYN Prop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SYN prop e has no effect on the direction of PT Bumi i.e., PT Bumi and SYN Prop go up and down completely randomly.
Pair Corralation between PT Bumi and SYN Prop
Assuming the 90 days horizon PT Bumi Resources is expected to generate 9.16 times more return on investment than SYN Prop. However, PT Bumi is 9.16 times more volatile than SYN prop e. It trades about 0.05 of its potential returns per unit of risk. SYN prop e is currently generating about 0.08 per unit of risk. If you would invest 0.84 in PT Bumi Resources on September 30, 2024 and sell it today you would lose (0.63) from holding PT Bumi Resources or give up 75.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bumi Resources vs. SYN prop e
Performance |
| Timeline |
| PT Bumi Resources |
| SYN prop e |
PT Bumi and SYN Prop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bumi and SYN Prop
The main advantage of trading using opposite PT Bumi and SYN Prop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bumi position performs unexpectedly, SYN Prop 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 SYN Prop will offset losses from the drop in SYN Prop's long position.The idea behind PT Bumi Resources and SYN prop e 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.| SYN Prop vs. Mativ Holdings | SYN Prop vs. Stepan Company | SYN Prop vs. Hurco Companies | SYN Prop vs. Luxfer Holdings PLC |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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