Correlation Between PT Bumi and SERITAGE GWTH
Can any of the company-specific risk be diversified away by investing in both PT Bumi and SERITAGE GWTH 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 SERITAGE GWTH 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 SERITAGE GWTH PRA, you can compare the effects of market volatilities on PT Bumi and SERITAGE GWTH 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 SERITAGE GWTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bumi and SERITAGE GWTH.
Diversification Opportunities for PT Bumi and SERITAGE GWTH
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PJM and SERITAGE is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding PT Bumi Resources and SERITAGE GWTH PRA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SERITAGE GWTH PRA 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 SERITAGE GWTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SERITAGE GWTH PRA has no effect on the direction of PT Bumi i.e., PT Bumi and SERITAGE GWTH go up and down completely randomly.
Pair Corralation between PT Bumi and SERITAGE GWTH
Assuming the 90 days horizon PT Bumi is expected to generate 1.24 times less return on investment than SERITAGE GWTH. In addition to that, PT Bumi is 3.0 times more volatile than SERITAGE GWTH PRA. It trades about 0.03 of its total potential returns per unit of risk. SERITAGE GWTH PRA is currently generating about 0.12 per unit of volatility. If you would invest 398.00 in SERITAGE GWTH PRA on August 29, 2024 and sell it today you would earn a total of 24.00 from holding SERITAGE GWTH PRA or generate 6.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
PT Bumi Resources vs. SERITAGE GWTH PRA
Performance |
| Timeline |
| PT Bumi Resources |
| SERITAGE GWTH PRA |
PT Bumi and SERITAGE GWTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bumi and SERITAGE GWTH
The main advantage of trading using opposite PT Bumi and SERITAGE GWTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bumi position performs unexpectedly, SERITAGE GWTH 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 SERITAGE GWTH will offset losses from the drop in SERITAGE GWTH's long position.| PT Bumi vs. BE Semiconductor Industries | PT Bumi vs. PACIFIC ONLINE | PT Bumi vs. Gruppo Mutuionline SpA | PT Bumi vs. GungHo Online Entertainment |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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