Correlation Between Perintis Triniti and Bumi Benowo

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

By analyzing existing cross correlation between Perintis Triniti Properti and Bumi Benowo Sukses, you can compare the effects of market volatilities on Perintis Triniti and Bumi Benowo 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 Perintis Triniti with a short position of Bumi Benowo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perintis Triniti and Bumi Benowo.

Diversification Opportunities for Perintis Triniti and Bumi Benowo

-0.83

Correlation Coefficient

Perintis Triniti  Bumi Benowo

Pay attention - limited upside

The 3 months correlation between Perintis and Bumi is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Perintis Triniti Properti and Bumi Benowo Sukses in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bumi Benowo Sukses and Perintis Triniti 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 Perintis Triniti Properti are associated (or correlated) with Bumi Benowo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bumi Benowo Sukses has no effect on the direction of Perintis Triniti i.e., Perintis Triniti and Bumi Benowo go up and down completely randomly.

Pair Corralation between Perintis Triniti and Bumi Benowo

Assuming the 90 days trading horizon Perintis Triniti Properti is expected to under-perform the Bumi Benowo. But the stock apears to be less risky and, when comparing its historical volatility, Perintis Triniti Properti is 1.0 times less risky than Bumi Benowo. The stock trades about -0.14 of its potential returns per unit of risk. The Bumi Benowo Sukses is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  18,500  in Bumi Benowo Sukses on December 21, 2024 and sell it today you would earn a total of  2,100  from holding Bumi Benowo Sukses or generate 11.35% return on investment over 90 days.

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

Perintis Triniti Properti  vs.  Bumi Benowo Sukses

Perintis Triniti Properti

Risk-Adjusted Performance

Very Weak

Over the last 90 days Perintis Triniti Properti has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Bumi Benowo Sukses

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bumi Benowo Sukses are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward-looking signals, Bumi Benowo disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Perintis Triniti and Bumi Benowo

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

The idea behind Perintis Triniti Properti and Bumi Benowo Sukses 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.