Correlation Between Bukit Asam and CEIX Old

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

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

Diversification Opportunities for Bukit Asam and CEIX Old

0.0

Correlation Coefficient

Bukit Asam  CEIX Old

Pay attention - limited upside

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

Pair Corralation between Bukit Asam and CEIX Old

If you would invest  401.00  in Bukit Asam Tbk on December 29, 2024 and sell it today you would lose (1.00) from holding Bukit Asam Tbk or give up 0.25% of portfolio value over 90 days.

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

Bukit Asam Tbk  vs.  CEIX Old

Bukit Asam Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bukit Asam Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Bukit Asam is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

CEIX Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days CEIX Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, CEIX Old is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bukit Asam and CEIX Old

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

The idea behind Bukit Asam Tbk and CEIX 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.