Correlation Between Rukun Raharja and Bumi Resources
Can any of the company-specific risk be diversified away by investing in both Rukun Raharja and Bumi Resources 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 Rukun Raharja and Bumi Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rukun Raharja Tbk and Bumi Resources Tbk, you can compare the effects of market volatilities on Rukun Raharja and Bumi Resources 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 Rukun Raharja with a short position of Bumi Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rukun Raharja and Bumi Resources.
Diversification Opportunities for Rukun Raharja and Bumi Resources
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rukun and Bumi is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Rukun Raharja Tbk and Bumi Resources Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bumi Resources Tbk and Rukun Raharja 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 Rukun Raharja Tbk are associated (or correlated) with Bumi Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bumi Resources Tbk has no effect on the direction of Rukun Raharja i.e., Rukun Raharja and Bumi Resources go up and down completely randomly.
Pair Corralation between Rukun Raharja and Bumi Resources
Assuming the 90 days trading horizon Rukun Raharja Tbk is expected to generate 1.14 times more return on investment than Bumi Resources. However, Rukun Raharja is 1.14 times more volatile than Bumi Resources Tbk. It trades about 0.21 of its potential returns per unit of risk. Bumi Resources Tbk is currently generating about 0.09 per unit of risk. If you would invest 165,000 in Rukun Raharja Tbk on September 3, 2024 and sell it today you would earn a total of 48,000 from holding Rukun Raharja Tbk or generate 29.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rukun Raharja Tbk vs. Bumi Resources Tbk
Performance |
| Timeline |
| Rukun Raharja Tbk |
| Bumi Resources Tbk |
Rukun Raharja and Bumi Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rukun Raharja and Bumi Resources
The main advantage of trading using opposite Rukun Raharja and Bumi Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rukun Raharja position performs unexpectedly, Bumi Resources 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 Bumi Resources will offset losses from the drop in Bumi Resources' long position.| Rukun Raharja vs. Weha Transportasi Indonesia | Rukun Raharja vs. Mitra Pinasthika Mustika | Rukun Raharja vs. Jakarta Int Hotels | Rukun Raharja vs. Asuransi Harta Aman |
| Bumi Resources vs. Weha Transportasi Indonesia | Bumi Resources vs. Mitra Pinasthika Mustika | Bumi Resources vs. Jakarta Int Hotels | Bumi Resources vs. Asuransi Harta Aman |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |