Correlation Between Arthavest Tbk and Bayu Buana
Can any of the company-specific risk be diversified away by investing in both Arthavest Tbk 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 Arthavest Tbk and Bayu Buana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arthavest Tbk and Bayu Buana Tbk, you can compare the effects of market volatilities on Arthavest Tbk 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 Arthavest Tbk with a short position of Bayu Buana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arthavest Tbk and Bayu Buana.
Diversification Opportunities for Arthavest Tbk and Bayu Buana
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Arthavest and Bayu is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Arthavest 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 Arthavest Tbk 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 Arthavest 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 Arthavest Tbk i.e., Arthavest Tbk and Bayu Buana go up and down completely randomly.
Pair Corralation between Arthavest Tbk and Bayu Buana
Assuming the 90 days trading horizon Arthavest Tbk is expected to under-perform the Bayu Buana. But the stock apears to be less risky and, when comparing its historical volatility, Arthavest Tbk is 1.02 times less risky than Bayu Buana. The stock trades about -0.06 of its potential returns per unit of risk. The Bayu Buana Tbk is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 128,527 in Bayu Buana Tbk on August 29, 2024 and sell it today you would earn a total of 5,473 from holding Bayu Buana Tbk or generate 4.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arthavest Tbk vs. Bayu Buana Tbk
Performance |
| Timeline |
| Arthavest Tbk |
| Bayu Buana Tbk |
Arthavest Tbk and Bayu Buana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arthavest Tbk and Bayu Buana
The main advantage of trading using opposite Arthavest Tbk and Bayu Buana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arthavest Tbk 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.| Arthavest Tbk vs. Asuransi Bintang Tbk | Arthavest Tbk vs. Pacific Strategic Financial | Arthavest Tbk vs. Maming Enam Sembilan | Arthavest Tbk vs. Asuransi Harta Aman |
| Bayu Buana vs. Akbar Indomakmur Stimec | Bayu Buana vs. Mahaka Media Tbk | Bayu Buana vs. Fortune Indonesia Tbk | Bayu Buana vs. Gema Grahasarana Tbk |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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