Correlation Between Bayu Buana and Graha Layar
Can any of the company-specific risk be diversified away by investing in both Bayu Buana and Graha Layar 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 Graha Layar 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 Graha Layar Prima, you can compare the effects of market volatilities on Bayu Buana and Graha Layar 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 Graha Layar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayu Buana and Graha Layar.
Diversification Opportunities for Bayu Buana and Graha Layar
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bayu and Graha is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Bayu Buana Tbk and Graha Layar Prima in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graha Layar Prima 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 Graha Layar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graha Layar Prima has no effect on the direction of Bayu Buana i.e., Bayu Buana and Graha Layar go up and down completely randomly.
Pair Corralation between Bayu Buana and Graha Layar
Assuming the 90 days trading horizon Bayu Buana Tbk is expected to generate 1.1 times more return on investment than Graha Layar. However, Bayu Buana is 1.1 times more volatile than Graha Layar Prima. It trades about -0.26 of its potential returns per unit of risk. Graha Layar Prima is currently generating about -0.31 per unit of risk. If you would invest 146,500 in Bayu Buana Tbk on August 30, 2024 and sell it today you would lose (12,500) from holding Bayu Buana Tbk or give up 8.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bayu Buana Tbk vs. Graha Layar Prima
Performance |
| Timeline |
| Bayu Buana Tbk |
| Graha Layar Prima |
Bayu Buana and Graha Layar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayu Buana and Graha Layar
The main advantage of trading using opposite Bayu Buana and Graha Layar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayu Buana position performs unexpectedly, Graha Layar 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 Graha Layar will offset losses from the drop in Graha Layar'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 |
| Graha Layar vs. Electronic City Indonesia | Graha Layar vs. Bayu Buana Tbk | Graha Layar vs. Bintang Oto Global | Graha Layar vs. Garuda Metalindo 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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