Correlation Between PT Bayan and PT Adaro
Can any of the company-specific risk be diversified away by investing in both PT Bayan and PT Adaro 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 PT Bayan and PT Adaro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Bayan Resources and PT Adaro Energy, you can compare the effects of market volatilities on PT Bayan and PT Adaro 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 PT Bayan with a short position of PT Adaro. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bayan and PT Adaro.
Diversification Opportunities for PT Bayan and PT Adaro
Very good diversification
The 3 months correlation between BNB and A64 is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding PT Bayan Resources and PT Adaro Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Adaro Energy and PT Bayan 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 PT Bayan Resources are associated (or correlated) with PT Adaro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Adaro Energy has no effect on the direction of PT Bayan i.e., PT Bayan and PT Adaro go up and down completely randomly.
Pair Corralation between PT Bayan and PT Adaro
Assuming the 90 days horizon PT Bayan Resources is expected to generate 0.53 times more return on investment than PT Adaro. However, PT Bayan Resources is 1.88 times less risky than PT Adaro. It trades about 0.21 of its potential returns per unit of risk. PT Adaro Energy is currently generating about -0.22 per unit of risk. If you would invest 97.00 in PT Bayan Resources on September 5, 2024 and sell it today you would earn a total of 18.00 from holding PT Bayan Resources or generate 18.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
PT Bayan Resources vs. PT Adaro Energy
Performance |
| Timeline |
| PT Bayan Resources |
| PT Adaro Energy |
PT Bayan and PT Adaro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bayan and PT Adaro
The main advantage of trading using opposite PT Bayan and PT Adaro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bayan position performs unexpectedly, PT Adaro 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 PT Adaro will offset losses from the drop in PT Adaro's long position.| PT Bayan vs. Regions Financial | PT Bayan vs. JD SPORTS FASH | PT Bayan vs. G III Apparel Group | PT Bayan vs. ANTA SPORTS PRODUCT |
| PT Adaro vs. PT Bayan Resources | PT Adaro vs. Yanzhou Coal Mining | PT Adaro vs. Yanzhou Coal Mining | PT Adaro vs. Whitehaven Coal Limited |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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