Correlation Between Bukit Asam and China Shenhua
Can any of the company-specific risk be diversified away by investing in both Bukit Asam and China Shenhua 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 China Shenhua 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 China Shenhua Energy, you can compare the effects of market volatilities on Bukit Asam and China Shenhua 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 China Shenhua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bukit Asam and China Shenhua.
Diversification Opportunities for Bukit Asam and China Shenhua
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bukit and China is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Bukit Asam Tbk and China Shenhua Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Shenhua Energy 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 China Shenhua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Shenhua Energy has no effect on the direction of Bukit Asam i.e., Bukit Asam and China Shenhua go up and down completely randomly.
Pair Corralation between Bukit Asam and China Shenhua
If you would invest 420.00 in China Shenhua Energy on August 31, 2024 and sell it today you would earn a total of 35.00 from holding China Shenhua Energy or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bukit Asam Tbk vs. China Shenhua Energy
Performance |
| Timeline |
| Bukit Asam Tbk |
| China Shenhua Energy |
Bukit Asam and China Shenhua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bukit Asam and China Shenhua
The main advantage of trading using opposite Bukit Asam and China Shenhua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bukit Asam position performs unexpectedly, China Shenhua 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 China Shenhua will offset losses from the drop in China Shenhua's long position.| Bukit Asam vs. Tyson Foods | Bukit Asam vs. Freedom Internet Group | Bukit Asam vs. Reservoir Media | Bukit Asam vs. Grupo Televisa SAB |
| China Shenhua vs. Bukit Asam Tbk | China Shenhua vs. Indo Tambangraya Megah | China Shenhua vs. Thungela Resources Limited |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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