Correlation Between PT Bumi and Windfall Geotek
Can any of the company-specific risk be diversified away by investing in both PT Bumi and Windfall Geotek 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 Windfall Geotek 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 Windfall Geotek, you can compare the effects of market volatilities on PT Bumi and Windfall Geotek 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 Windfall Geotek. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bumi and Windfall Geotek.
Diversification Opportunities for PT Bumi and Windfall Geotek
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PBMRF and Windfall is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding PT Bumi Resources and Windfall Geotek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Windfall Geotek 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 Windfall Geotek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Windfall Geotek has no effect on the direction of PT Bumi i.e., PT Bumi and Windfall Geotek go up and down completely randomly.
Pair Corralation between PT Bumi and Windfall Geotek
Assuming the 90 days horizon PT Bumi is expected to generate 2.44 times less return on investment than Windfall Geotek. But when comparing it to its historical volatility, PT Bumi Resources is 3.56 times less risky than Windfall Geotek. It trades about 0.16 of its potential returns per unit of risk. Windfall Geotek is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1.00 in Windfall Geotek on September 12, 2024 and sell it today you would earn a total of 0.05 from holding Windfall Geotek or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bumi Resources vs. Windfall Geotek
Performance |
| Timeline |
| PT Bumi Resources |
| Windfall Geotek |
PT Bumi and Windfall Geotek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bumi and Windfall Geotek
The main advantage of trading using opposite PT Bumi and Windfall Geotek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bumi position performs unexpectedly, Windfall Geotek 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 Windfall Geotek will offset losses from the drop in Windfall Geotek's long position.| PT Bumi vs. Adaro Energy Tbk | PT Bumi vs. Alliance Resource Partners | PT Bumi vs. Recursion Pharmaceuticals | PT Bumi vs. PayPal Holdings |
| Windfall Geotek vs. AB International Group | Windfall Geotek vs. Image Protect | Windfall Geotek vs. Bowmo Inc | Windfall Geotek vs. Protek Capital |
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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