Correlation Between Bukit Asam and Peabody Energy
Can any of the company-specific risk be diversified away by investing in both Bukit Asam and Peabody Energy 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 Bukit Asam and Peabody Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bukit Asam Tbk and Peabody Energy Corp, you can compare the effects of market volatilities on Bukit Asam and Peabody Energy 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 Bukit Asam with a short position of Peabody Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bukit Asam and Peabody Energy.
Diversification Opportunities for Bukit Asam and Peabody Energy
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bukit and Peabody is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Bukit Asam Tbk and Peabody Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peabody Energy Corp and Bukit Asam 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 Bukit Asam Tbk are associated (or correlated) with Peabody Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peabody Energy Corp has no effect on the direction of Bukit Asam i.e., Bukit Asam and Peabody Energy go up and down completely randomly.
Pair Corralation between Bukit Asam and Peabody Energy
Assuming the 90 days horizon Bukit Asam Tbk is expected to generate 1.48 times more return on investment than Peabody Energy. However, Bukit Asam is 1.48 times more volatile than Peabody Energy Corp. It trades about 0.04 of its potential returns per unit of risk. Peabody Energy Corp is currently generating about -0.04 per unit of risk. If you would invest 366.00 in Bukit Asam Tbk on November 9, 2024 and sell it today you would earn a total of 59.00 from holding Bukit Asam Tbk or generate 16.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 79.4% |
| Values | Daily Returns |
Bukit Asam Tbk vs. Peabody Energy Corp
Performance |
| Timeline |
| Bukit Asam Tbk |
| Peabody Energy Corp |
Bukit Asam and Peabody Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bukit Asam and Peabody Energy
The main advantage of trading using opposite Bukit Asam and Peabody Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bukit Asam position performs unexpectedly, Peabody Energy 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 Peabody Energy will offset losses from the drop in Peabody Energy's long position.| Bukit Asam vs. Ihuman Inc | Bukit Asam vs. NorthWestern | Bukit Asam vs. Yuexiu Transport Infrastructure | Bukit Asam vs. Verra Mobility Corp |
| Peabody Energy vs. Alliance Resource Partners | Peabody Energy vs. Natural Resource Partners | Peabody Energy vs. Hallador Energy | Peabody Energy vs. NACCO Industries |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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