Correlation Between PT Adaro and PT Bayan
Can any of the company-specific risk be diversified away by investing in both PT Adaro and PT Bayan 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 Adaro and PT Bayan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Adaro Energy and PT Bayan Resources, you can compare the effects of market volatilities on PT Adaro and PT Bayan 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 Adaro with a short position of PT Bayan. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Adaro and PT Bayan.
Diversification Opportunities for PT Adaro and PT Bayan
Very good diversification
The 3 months correlation between A64 and BNB is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding PT Adaro Energy and PT Bayan Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bayan Resources and PT Adaro 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 Adaro Energy are associated (or correlated) with PT Bayan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bayan Resources has no effect on the direction of PT Adaro i.e., PT Adaro and PT Bayan go up and down completely randomly.
Pair Corralation between PT Adaro and PT Bayan
Assuming the 90 days horizon PT Adaro Energy is expected to generate 2.42 times more return on investment than PT Bayan. However, PT Adaro is 2.42 times more volatile than PT Bayan Resources. It trades about 0.02 of its potential returns per unit of risk. PT Bayan Resources is currently generating about 0.02 per unit of risk. If you would invest 15.00 in PT Adaro Energy on September 4, 2024 and sell it today you would lose (1.00) from holding PT Adaro Energy or give up 6.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Adaro Energy vs. PT Bayan Resources
Performance |
| Timeline |
| PT Adaro Energy |
| PT Bayan Resources |
PT Adaro and PT Bayan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Adaro and PT Bayan
The main advantage of trading using opposite PT Adaro and PT Bayan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Adaro position performs unexpectedly, PT Bayan 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 Bayan will offset losses from the drop in PT Bayan's long position.| PT Adaro vs. PT Bayan Resources | PT Adaro vs. Yanzhou Coal Mining | PT Adaro vs. Yanzhou Coal Mining | PT Adaro vs. Yancoal Australia |
| PT Bayan vs. Yanzhou Coal Mining | PT Bayan vs. Yanzhou Coal Mining | PT Bayan vs. PT Adaro Energy | PT Bayan vs. Yancoal Australia |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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