Correlation Between Bayu Buana and Hero Supermarket
Can any of the company-specific risk be diversified away by investing in both Bayu Buana and Hero Supermarket 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 Hero Supermarket 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 Hero Supermarket Tbk, you can compare the effects of market volatilities on Bayu Buana and Hero Supermarket 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 Hero Supermarket. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayu Buana and Hero Supermarket.
Diversification Opportunities for Bayu Buana and Hero Supermarket
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bayu and Hero is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Bayu Buana Tbk and Hero Supermarket Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hero Supermarket 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 Hero Supermarket. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hero Supermarket Tbk has no effect on the direction of Bayu Buana i.e., Bayu Buana and Hero Supermarket go up and down completely randomly.
Pair Corralation between Bayu Buana and Hero Supermarket
Assuming the 90 days trading horizon Bayu Buana Tbk is expected to generate 0.91 times more return on investment than Hero Supermarket. However, Bayu Buana Tbk is 1.1 times less risky than Hero Supermarket. It trades about 0.05 of its potential returns per unit of risk. Hero Supermarket Tbk is currently generating about -0.1 per unit of risk. If you would invest 85,464 in Bayu Buana Tbk on November 27, 2024 and sell it today you would earn a total of 43,036 from holding Bayu Buana Tbk or generate 50.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bayu Buana Tbk vs. Hero Supermarket Tbk
Performance |
| Timeline |
| Bayu Buana Tbk |
| Hero Supermarket Tbk |
Bayu Buana and Hero Supermarket Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayu Buana and Hero Supermarket
The main advantage of trading using opposite Bayu Buana and Hero Supermarket positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayu Buana position performs unexpectedly, Hero Supermarket 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 Hero Supermarket will offset losses from the drop in Hero Supermarket'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 |
| Hero Supermarket vs. Fast Food Indonesia | Hero Supermarket vs. Enseval Putra Megatrading | Hero Supermarket vs. Matahari Putra Prima | Hero Supermarket vs. Hexindo Adiperkasa 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |