Correlation Between PT Bumi and PLAYWAY SA
Can any of the company-specific risk be diversified away by investing in both PT Bumi and PLAYWAY SA 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 PLAYWAY SA 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 PLAYWAY SA ZY 10, you can compare the effects of market volatilities on PT Bumi and PLAYWAY SA 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 PLAYWAY SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bumi and PLAYWAY SA.
Diversification Opportunities for PT Bumi and PLAYWAY SA
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PJM and PLAYWAY is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding PT Bumi Resources and PLAYWAY SA ZY 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYWAY SA ZY 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 PLAYWAY SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYWAY SA ZY has no effect on the direction of PT Bumi i.e., PT Bumi and PLAYWAY SA go up and down completely randomly.
Pair Corralation between PT Bumi and PLAYWAY SA
Assuming the 90 days horizon PT Bumi Resources is expected to generate 1.76 times more return on investment than PLAYWAY SA. However, PT Bumi is 1.76 times more volatile than PLAYWAY SA ZY 10. It trades about 0.1 of its potential returns per unit of risk. PLAYWAY SA ZY 10 is currently generating about 0.06 per unit of risk. If you would invest 0.40 in PT Bumi Resources on September 3, 2024 and sell it today you would earn a total of 0.40 from holding PT Bumi Resources or generate 100.0% 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. PLAYWAY SA ZY 10
Performance |
| Timeline |
| PT Bumi Resources |
| PLAYWAY SA ZY |
PT Bumi and PLAYWAY SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bumi and PLAYWAY SA
The main advantage of trading using opposite PT Bumi and PLAYWAY SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bumi position performs unexpectedly, PLAYWAY SA 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 PLAYWAY SA will offset losses from the drop in PLAYWAY SA'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 |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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