Correlation Between PT Bumi and RCRT Old

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

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

Diversification Opportunities for PT Bumi and RCRT Old

-0.32

Correlation Coefficient

PT Bumi  RCRT Old

Very good diversification

The 3 months correlation between PBMRF and RCRT is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding PT Bumi Resources and RCRT Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RCRT Old and PT Bumi 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 PT Bumi Resources are associated (or correlated) with RCRT Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RCRT Old has no effect on the direction of PT Bumi i.e., PT Bumi and RCRT Old go up and down completely randomly.

Pair Corralation between PT Bumi and RCRT Old

If you would invest  274.00  in RCRT Old on October 10, 2024 and sell it today you would earn a total of  0.00  from holding RCRT Old or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

PT Bumi Resources  vs.  RCRT Old

PT Bumi Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Bumi Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

RCRT Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RCRT Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, RCRT Old is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with PT Bumi and RCRT Old

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

The idea behind PT Bumi Resources and RCRT Old 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.