Correlation Between Bayu Buana and Mahaka Media
Can any of the company-specific risk be diversified away by investing in both Bayu Buana and Mahaka Media 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 Bayu Buana and Mahaka Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bayu Buana Tbk and Mahaka Media Tbk, you can compare the effects of market volatilities on Bayu Buana and Mahaka Media 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 Bayu Buana with a short position of Mahaka Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayu Buana and Mahaka Media.
Diversification Opportunities for Bayu Buana and Mahaka Media
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bayu and Mahaka is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Bayu Buana Tbk and Mahaka Media Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mahaka Media Tbk and Bayu Buana 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 Bayu Buana Tbk are associated (or correlated) with Mahaka Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mahaka Media Tbk has no effect on the direction of Bayu Buana i.e., Bayu Buana and Mahaka Media go up and down completely randomly.
Pair Corralation between Bayu Buana and Mahaka Media
Assuming the 90 days trading horizon Bayu Buana Tbk is expected to generate 0.25 times more return on investment than Mahaka Media. However, Bayu Buana Tbk is 4.04 times less risky than Mahaka Media. It trades about -0.16 of its potential returns per unit of risk. Mahaka Media Tbk is currently generating about -0.17 per unit of risk. If you would invest 133,500 in Bayu Buana Tbk on November 27, 2024 and sell it today you would lose (5,000) from holding Bayu Buana Tbk or give up 3.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bayu Buana Tbk vs. Mahaka Media Tbk
Performance |
| Timeline |
| Bayu Buana Tbk |
| Mahaka Media Tbk |
Bayu Buana and Mahaka Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayu Buana and Mahaka Media
The main advantage of trading using opposite Bayu Buana and Mahaka Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayu Buana position performs unexpectedly, Mahaka Media 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 Mahaka Media will offset losses from the drop in Mahaka Media's long position.| Bayu Buana vs. Akbar Indomakmur Stimec | Bayu Buana vs. Mahaka Media Tbk | Bayu Buana vs. Fortune Indonesia Tbk | Bayu Buana vs. Gema Grahasarana Tbk |
| Mahaka Media vs. Akbar Indomakmur Stimec | Mahaka Media vs. Bayu Buana Tbk | Mahaka Media vs. Centratama Telekomunikasi Ind | Mahaka Media vs. Fortune Indonesia 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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