Correlation Between Mahaka Media and Bayu Buana
Can any of the company-specific risk be diversified away by investing in both Mahaka Media and Bayu Buana 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 Mahaka Media and Bayu Buana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mahaka Media Tbk and Bayu Buana Tbk, you can compare the effects of market volatilities on Mahaka Media and Bayu Buana 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 Mahaka Media with a short position of Bayu Buana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mahaka Media and Bayu Buana.
Diversification Opportunities for Mahaka Media and Bayu Buana
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mahaka and Bayu is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Mahaka Media Tbk and Bayu Buana Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayu Buana Tbk and Mahaka Media 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 Mahaka Media Tbk are associated (or correlated) with Bayu Buana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayu Buana Tbk has no effect on the direction of Mahaka Media i.e., Mahaka Media and Bayu Buana go up and down completely randomly.
Pair Corralation between Mahaka Media and Bayu Buana
Assuming the 90 days trading horizon Mahaka Media Tbk is expected to under-perform the Bayu Buana. In addition to that, Mahaka Media is 4.7 times more volatile than Bayu Buana Tbk. It trades about -0.23 of its total potential returns per unit of risk. Bayu Buana Tbk is currently generating about -0.16 per unit of volatility. If you would invest 136,500 in Bayu Buana Tbk on November 3, 2024 and sell it today you would lose (3,000) from holding Bayu Buana Tbk or give up 2.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mahaka Media Tbk vs. Bayu Buana Tbk
Performance |
| Timeline |
| Mahaka Media Tbk |
| Bayu Buana Tbk |
Mahaka Media and Bayu Buana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mahaka Media and Bayu Buana
The main advantage of trading using opposite Mahaka Media and Bayu Buana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mahaka Media position performs unexpectedly, Bayu Buana 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 Bayu Buana will offset losses from the drop in Bayu Buana's long position.| Mahaka Media vs. Akbar Indomakmur Stimec | Mahaka Media vs. Bayu Buana Tbk | Mahaka Media vs. Centratama Telekomunikasi Ind | Mahaka Media vs. Fortune Indonesia Tbk |
| Bayu Buana vs. Catur Sentosa Adiprana | Bayu Buana vs. Fast Food Indonesia | Bayu Buana vs. Hero Supermarket Tbk | Bayu Buana vs. Graha Layar Prima |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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