Correlation Between Bukit Asam and Thungela Resources
Can any of the company-specific risk be diversified away by investing in both Bukit Asam and Thungela 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 Bukit Asam and Thungela Resources 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 Thungela Resources Limited, you can compare the effects of market volatilities on Bukit Asam and Thungela 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 Bukit Asam with a short position of Thungela Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bukit Asam and Thungela Resources.
Diversification Opportunities for Bukit Asam and Thungela Resources
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bukit and Thungela is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Bukit Asam Tbk and Thungela Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thungela Resources 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 Thungela Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thungela Resources has no effect on the direction of Bukit Asam i.e., Bukit Asam and Thungela Resources go up and down completely randomly.
Pair Corralation between Bukit Asam and Thungela Resources
Assuming the 90 days horizon Bukit Asam Tbk is expected to generate 0.39 times more return on investment than Thungela Resources. However, Bukit Asam Tbk is 2.58 times less risky than Thungela Resources. It trades about 0.25 of its potential returns per unit of risk. Thungela Resources Limited is currently generating about 0.08 per unit of risk. If you would invest 406.00 in Bukit Asam Tbk on November 9, 2024 and sell it today you would earn a total of 19.00 from holding Bukit Asam Tbk or generate 4.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 85.0% |
| Values | Daily Returns |
Bukit Asam Tbk vs. Thungela Resources Limited
Performance |
| Timeline |
| Bukit Asam Tbk |
| Thungela Resources |
Bukit Asam and Thungela Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bukit Asam and Thungela Resources
The main advantage of trading using opposite Bukit Asam and Thungela Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bukit Asam position performs unexpectedly, Thungela 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 Thungela Resources will offset losses from the drop in Thungela Resources' long position.| Bukit Asam vs. Ihuman Inc | Bukit Asam vs. NorthWestern | Bukit Asam vs. Yuexiu Transport Infrastructure | Bukit Asam vs. Verra Mobility Corp |
| Thungela Resources vs. Adaro Energy Tbk | Thungela Resources vs. Geo Energy Resources | Thungela Resources vs. Bukit Asam Tbk | Thungela Resources vs. New Hope |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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