Correlation Between PT Bumi and Sun Life
Can any of the company-specific risk be diversified away by investing in both PT Bumi and Sun Life 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 Sun Life 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 Sun Life Financial, you can compare the effects of market volatilities on PT Bumi and Sun Life 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 Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bumi and Sun Life.
Diversification Opportunities for PT Bumi and Sun Life
Poor diversification
The 3 months correlation between PJM and Sun is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding PT Bumi Resources and Sun Life Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Life Financial 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 Sun Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Life Financial has no effect on the direction of PT Bumi i.e., PT Bumi and Sun Life go up and down completely randomly.
Pair Corralation between PT Bumi and Sun Life
Assuming the 90 days horizon PT Bumi is expected to generate 2.13 times less return on investment than Sun Life. In addition to that, PT Bumi is 4.28 times more volatile than Sun Life Financial. It trades about 0.03 of its total potential returns per unit of risk. Sun Life Financial is currently generating about 0.29 per unit of volatility. If you would invest 5,250 in Sun Life Financial on August 29, 2024 and sell it today you would earn a total of 600.00 from holding Sun Life Financial or generate 11.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
PT Bumi Resources vs. Sun Life Financial
Performance |
| Timeline |
| PT Bumi Resources |
| Sun Life Financial |
PT Bumi and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bumi and Sun Life
The main advantage of trading using opposite PT Bumi and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bumi position performs unexpectedly, Sun Life 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 Sun Life will offset losses from the drop in Sun Life'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 |
| Sun Life vs. Pure Storage | Sun Life vs. Science Applications International | Sun Life vs. SBA Communications Corp | Sun Life vs. Public Storage |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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