Correlation Between Peabody Energy and Bukit Asam

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

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

Diversification Opportunities for Peabody Energy and Bukit Asam

-0.46

Correlation Coefficient

Peabody Energy  Bukit Asam

Very good diversification

The 3 months correlation between Peabody and Bukit is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Peabody Energy Corp and Bukit Asam Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bukit Asam Tbk and Peabody Energy 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 Peabody Energy Corp are associated (or correlated) with Bukit Asam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bukit Asam Tbk has no effect on the direction of Peabody Energy i.e., Peabody Energy and Bukit Asam go up and down completely randomly.

Pair Corralation between Peabody Energy and Bukit Asam

Considering the 90-day investment horizon Peabody Energy Corp is expected to generate 0.73 times more return on investment than Bukit Asam. However, Peabody Energy Corp is 1.38 times less risky than Bukit Asam. It trades about 0.11 of its potential returns per unit of risk. Bukit Asam Tbk is currently generating about -0.04 per unit of risk. If you would invest  1,409  in Peabody Energy Corp on May 8, 2025 and sell it today you would earn a total of  312.00  from holding Peabody Energy Corp or generate 22.14% return on investment over 90 days.

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

Peabody Energy Corp  vs.  Bukit Asam Tbk

Peabody Energy Corp

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Peabody Energy Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Peabody Energy unveiled solid returns over the last few months and may actually be approaching a breakup point.

Bukit Asam Tbk

Risk-Adjusted Performance

Weakest

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 fragile performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Peabody Energy and Bukit Asam

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

The idea behind Peabody Energy Corp and Bukit Asam Tbk 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.