Correlation Between PT Bumi and TAMURA P
Can any of the company-specific risk be diversified away by investing in both PT Bumi and TAMURA P 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 TAMURA P 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 TAMURA P, you can compare the effects of market volatilities on PT Bumi and TAMURA P 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 TAMURA P. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bumi and TAMURA P.
Diversification Opportunities for PT Bumi and TAMURA P
Pay attention - limited upside
The 3 months correlation between PJM and TAMURA is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding PT Bumi Resources and TAMURA P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAMURA P 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 TAMURA P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAMURA P has no effect on the direction of PT Bumi i.e., PT Bumi and TAMURA P go up and down completely randomly.
Pair Corralation between PT Bumi and TAMURA P
Assuming the 90 days horizon PT Bumi Resources is expected to generate 2.77 times more return on investment than TAMURA P. However, PT Bumi is 2.77 times more volatile than TAMURA P. It trades about 0.08 of its potential returns per unit of risk. TAMURA P is currently generating about -0.06 per unit of risk. If you would invest 0.50 in PT Bumi Resources on September 3, 2024 and sell it today you would earn a total of 0.30 from holding PT Bumi Resources or generate 60.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bumi Resources vs. TAMURA P
Performance |
| Timeline |
| PT Bumi Resources |
| TAMURA P |
PT Bumi and TAMURA P Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bumi and TAMURA P
The main advantage of trading using opposite PT Bumi and TAMURA P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bumi position performs unexpectedly, TAMURA P 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 TAMURA P will offset losses from the drop in TAMURA P's long position.| PT Bumi vs. National Health Investors | PT Bumi vs. Bumrungrad Hospital Public | PT Bumi vs. SMA Solar Technology | PT Bumi vs. MACOM Technology Solutions |
| TAMURA P vs. Hon Hai Precision | TAMURA P vs. Samsung SDI Co | TAMURA P vs. Murata Manufacturing Co | TAMURA P vs. Mitsubishi Electric |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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