Correlation Between Recursion Pharmaceuticals and PT Bumi

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

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

Diversification Opportunities for Recursion Pharmaceuticals and PT Bumi

0.15

Correlation Coefficient

Recursion Pharmaceuticals  PT Bumi

Average diversification

The 3 months correlation between Recursion and PBMRF is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Recursion Pharmaceuticals and PT Bumi Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bumi Resources and Recursion Pharmaceuticals 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 Recursion Pharmaceuticals are associated (or correlated) with PT Bumi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bumi Resources has no effect on the direction of Recursion Pharmaceuticals i.e., Recursion Pharmaceuticals and PT Bumi go up and down completely randomly.

Pair Corralation between Recursion Pharmaceuticals and PT Bumi

If you would invest  610.00  in Recursion Pharmaceuticals on September 17, 2024 and sell it today you would earn a total of  85.00  from holding Recursion Pharmaceuticals or generate 13.93% return on investment over 90 days.

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

Recursion Pharmaceuticals  vs.  PT Bumi Resources

Recursion Pharmaceuticals

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Recursion Pharmaceuticals are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Recursion Pharmaceuticals may actually be approaching a critical reversion point that can send shares even higher in January 2025.

PT Bumi Resources

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PT Bumi Resources are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, PT Bumi reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Recursion Pharmaceuticals and PT Bumi

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

The idea behind Recursion Pharmaceuticals and PT Bumi Resources 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.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.