Correlation Between Scottish Mortgage and Bumitama Agri

Can any of the company-specific risk be diversified away by investing in both Scottish Mortgage and Bumitama Agri 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 Scottish Mortgage and Bumitama Agri into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Scottish Mortgage Investment and Bumitama Agri, you can compare the effects of market volatilities on Scottish Mortgage and Bumitama Agri 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 Scottish Mortgage with a short position of Bumitama Agri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scottish Mortgage and Bumitama Agri.

Diversification Opportunities for Scottish Mortgage and Bumitama Agri

0.0

Correlation Coefficient

Scottish Mortgage  Bumitama Agri

Pay attention - limited upside

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

Pair Corralation between Scottish Mortgage and Bumitama Agri

If you would invest  0.00  in Bumitama Agri on October 10, 2024 and sell it today you would earn a total of  0.00  from holding Bumitama Agri or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.88%
Values	Daily Returns

Scottish Mortgage Investment  vs.  Bumitama Agri

Scottish Mortgage

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Scottish Mortgage Investment are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Scottish Mortgage reported solid returns over the last few months and may actually be approaching a breakup point.

Bumitama Agri

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bumitama Agri has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Bumitama Agri is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Scottish Mortgage and Bumitama Agri

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

The idea behind Scottish Mortgage Investment and Bumitama Agri 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.