Correlation Between Bayu Buana and Fks Multi
Can any of the company-specific risk be diversified away by investing in both Bayu Buana and Fks Multi 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 Fks Multi 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 Fks Multi Agro, you can compare the effects of market volatilities on Bayu Buana and Fks Multi 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 Fks Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayu Buana and Fks Multi.
Diversification Opportunities for Bayu Buana and Fks Multi
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bayu and Fks is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Bayu Buana Tbk and Fks Multi Agro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fks Multi Agro 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 Fks Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fks Multi Agro has no effect on the direction of Bayu Buana i.e., Bayu Buana and Fks Multi go up and down completely randomly.
Pair Corralation between Bayu Buana and Fks Multi
Assuming the 90 days trading horizon Bayu Buana is expected to generate 37.71 times less return on investment than Fks Multi. But when comparing it to its historical volatility, Bayu Buana Tbk is 1.17 times less risky than Fks Multi. It trades about 0.01 of its potential returns per unit of risk. Fks Multi Agro is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 521,705 in Fks Multi Agro on August 25, 2024 and sell it today you would earn a total of 568,295 from holding Fks Multi Agro or generate 108.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.54% |
| Values | Daily Returns |
Bayu Buana Tbk vs. Fks Multi Agro
Performance |
| Timeline |
| Bayu Buana Tbk |
| Fks Multi Agro |
Bayu Buana and Fks Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayu Buana and Fks Multi
The main advantage of trading using opposite Bayu Buana and Fks Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayu Buana position performs unexpectedly, Fks Multi 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 Fks Multi will offset losses from the drop in Fks Multi'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 |
| Fks Multi vs. Enseval Putra Megatrading | Fks Multi vs. Fast Food Indonesia | Fks Multi vs. Gema Grahasarana Tbk | Fks Multi vs. Colorpak 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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