Correlation Between PT Bumi and Thunderbird Entertainment
Can any of the company-specific risk be diversified away by investing in both PT Bumi and Thunderbird 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 Thunderbird 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 Thunderbird Entertainment Group, you can compare the effects of market volatilities on PT Bumi and Thunderbird 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 Thunderbird Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bumi and Thunderbird Entertainment.
Diversification Opportunities for PT Bumi and Thunderbird Entertainment
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PBMRF and Thunderbird is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding PT Bumi Resources and Thunderbird Entertainment Grou in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thunderbird 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 Thunderbird Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thunderbird Entertainment has no effect on the direction of PT Bumi i.e., PT Bumi and Thunderbird Entertainment go up and down completely randomly.
Pair Corralation between PT Bumi and Thunderbird Entertainment
Assuming the 90 days horizon PT Bumi Resources is expected to generate 13.18 times more return on investment than Thunderbird Entertainment. However, PT Bumi is 13.18 times more volatile than Thunderbird Entertainment Group. It trades about 0.06 of its potential returns per unit of risk. Thunderbird Entertainment Group is currently generating about -0.01 per unit of risk. If you would invest 1.00 in PT Bumi Resources on August 30, 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 | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
PT Bumi Resources vs. Thunderbird Entertainment Grou
Performance |
| Timeline |
| PT Bumi Resources |
| Thunderbird Entertainment |
PT Bumi and Thunderbird Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bumi and Thunderbird Entertainment
The main advantage of trading using opposite PT Bumi and Thunderbird Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bumi position performs unexpectedly, Thunderbird 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 Thunderbird Entertainment will offset losses from the drop in Thunderbird Entertainment's long position.| PT Bumi vs. Adaro Energy Tbk | PT Bumi vs. Bukit Asam Tbk | PT Bumi vs. Yanzhou Coal Mining | PT Bumi vs. Yancoal Australia |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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