Correlation Between Bayu Buana and Electronic City
Can any of the company-specific risk be diversified away by investing in both Bayu Buana and Electronic City 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 Electronic City 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 Electronic City Indonesia, you can compare the effects of market volatilities on Bayu Buana and Electronic City 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 Electronic City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayu Buana and Electronic City.
Diversification Opportunities for Bayu Buana and Electronic City
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bayu and Electronic is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Bayu Buana Tbk and Electronic City Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic City Indonesia 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 Electronic City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electronic City Indonesia has no effect on the direction of Bayu Buana i.e., Bayu Buana and Electronic City go up and down completely randomly.
Pair Corralation between Bayu Buana and Electronic City
Assuming the 90 days trading horizon Bayu Buana Tbk is expected to generate 0.56 times more return on investment than Electronic City. However, Bayu Buana Tbk is 1.78 times less risky than Electronic City. It trades about 0.05 of its potential returns per unit of risk. Electronic City Indonesia is currently generating about -0.03 per unit of risk. If you would invest 89,962 in Bayu Buana Tbk on August 27, 2024 and sell it today you would earn a total of 48,038 from holding Bayu Buana Tbk or generate 53.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Bayu Buana Tbk vs. Electronic City Indonesia
Performance |
| Timeline |
| Bayu Buana Tbk |
| Electronic City Indonesia |
Bayu Buana and Electronic City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayu Buana and Electronic City
The main advantage of trading using opposite Bayu Buana and Electronic City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayu Buana position performs unexpectedly, Electronic City 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 Electronic City will offset losses from the drop in Electronic City'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 |
| Electronic City vs. Catur Sentosa Adiprana | Electronic City vs. Fast Food Indonesia | Electronic City vs. Hero Supermarket Tbk | Electronic City 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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