Correlation Between Bumi Resources and Acset Indonusa

Can any of the company-specific risk be diversified away by investing in both Bumi Resources and Acset Indonusa 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 Bumi Resources and Acset Indonusa into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bumi Resources Minerals and Acset Indonusa Tbk, you can compare the effects of market volatilities on Bumi Resources and Acset Indonusa 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 Bumi Resources with a short position of Acset Indonusa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bumi Resources and Acset Indonusa.

Diversification Opportunities for Bumi Resources and Acset Indonusa

0.0

Correlation Coefficient

Bumi Resources  Acset Indonusa

Pay attention - limited upside

The 3 months correlation between Bumi and Acset is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bumi Resources Minerals and Acset Indonusa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acset Indonusa Tbk and Bumi Resources 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 Bumi Resources Minerals are associated (or correlated) with Acset Indonusa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acset Indonusa Tbk has no effect on the direction of Bumi Resources i.e., Bumi Resources and Acset Indonusa go up and down completely randomly.

Pair Corralation between Bumi Resources and Acset Indonusa

If you would invest (100.00) in Bumi Resources Minerals on September 18, 2024 and sell it today you would earn a total of  100.00  from holding Bumi Resources Minerals or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Bumi Resources Minerals  vs.  Acset Indonusa Tbk

Bumi Resources Minerals

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Bumi Resources Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Bumi Resources is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Acset Indonusa Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acset Indonusa Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Bumi Resources and Acset Indonusa

The main advantage of trading using opposite Bumi Resources and Acset Indonusa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bumi Resources position performs unexpectedly, Acset Indonusa 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 Acset Indonusa will offset losses from the drop in Acset Indonusa's long position.

The idea behind Bumi Resources Minerals and Acset Indonusa Tbk pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.