Correlation Between Astra International and Bayan Resources
Can any of the company-specific risk be diversified away by investing in both Astra International and Bayan Resources 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 Astra International and Bayan Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astra International Tbk and Bayan Resources Tbk, you can compare the effects of market volatilities on Astra International and Bayan Resources 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 Astra International with a short position of Bayan Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra International and Bayan Resources.
Diversification Opportunities for Astra International and Bayan Resources
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Astra and Bayan is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Astra International Tbk and Bayan Resources Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayan Resources Tbk and Astra International 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 Astra International Tbk are associated (or correlated) with Bayan Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayan Resources Tbk has no effect on the direction of Astra International i.e., Astra International and Bayan Resources go up and down completely randomly.
Pair Corralation between Astra International and Bayan Resources
Assuming the 90 days trading horizon Astra International Tbk is expected to under-perform the Bayan Resources. In addition to that, Astra International is 1.17 times more volatile than Bayan Resources Tbk. It trades about -0.08 of its total potential returns per unit of risk. Bayan Resources Tbk is currently generating about 0.38 per unit of volatility. If you would invest 1,717,500 in Bayan Resources Tbk on August 27, 2024 and sell it today you would earn a total of 180,000 from holding Bayan Resources Tbk or generate 10.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astra International Tbk vs. Bayan Resources Tbk
Performance |
| Timeline |
| Astra International Tbk |
| Bayan Resources Tbk |
Astra International and Bayan Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astra International and Bayan Resources
The main advantage of trading using opposite Astra International and Bayan Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra International position performs unexpectedly, Bayan Resources 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 Bayan Resources will offset losses from the drop in Bayan Resources' long position.| Astra International vs. Telkom Indonesia Tbk | Astra International vs. Bank Mandiri Persero | Astra International vs. Bank Central Asia | Astra International vs. PT Indofood Sukses |
| Bayan Resources vs. Indo Tambangraya Megah | Bayan Resources vs. Indika Energy Tbk | Bayan Resources vs. Darma Henwa Tbk | Bayan Resources vs. Harum Energy 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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