Correlation Between PT Bumi and AEON MALL

Can any of the company-specific risk be diversified away by investing in both PT Bumi and AEON MALL 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 AEON MALL 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 AEON MALL LTD, you can compare the effects of market volatilities on PT Bumi and AEON MALL 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 AEON MALL. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bumi and AEON MALL.

Diversification Opportunities for PT Bumi and AEON MALL

-0.77

Correlation Coefficient

PT Bumi  AEON MALL

Pay attention - limited upside

The 3 months correlation between PJM and AEON is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding PT Bumi Resources and AEON MALL LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEON MALL LTD 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 AEON MALL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEON MALL LTD has no effect on the direction of PT Bumi i.e., PT Bumi and AEON MALL go up and down completely randomly.

Pair Corralation between PT Bumi and AEON MALL

Assuming the 90 days horizon PT Bumi Resources is expected to under-perform the AEON MALL. In addition to that, PT Bumi is 3.58 times more volatile than AEON MALL LTD. It trades about 0.0 of its total potential returns per unit of risk. AEON MALL LTD is currently generating about 0.11 per unit of volatility. If you would invest  1,204  in AEON MALL LTD on December 27, 2024 and sell it today you would earn a total of  216.00  from holding AEON MALL LTD or generate 17.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

PT Bumi Resources  vs.  AEON MALL LTD

PT Bumi Resources

Risk-Adjusted Performance

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 nearly stable basic indicators, PT Bumi is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

AEON MALL LTD

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AEON MALL LTD are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AEON MALL reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Bumi and AEON MALL

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

The idea behind PT Bumi Resources and AEON MALL LTD 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.