Correlation Between PT Bayan and Regions Financial
Can any of the company-specific risk be diversified away by investing in both PT Bayan and Regions Financial 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 Regions Financial 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 Regions Financial, you can compare the effects of market volatilities on PT Bayan and Regions Financial 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 Regions Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bayan and Regions Financial.
Diversification Opportunities for PT Bayan and Regions Financial
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BNB and Regions is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding PT Bayan Resources and Regions Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regions Financial 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 Regions Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regions Financial has no effect on the direction of PT Bayan i.e., PT Bayan and Regions Financial go up and down completely randomly.
Pair Corralation between PT Bayan and Regions Financial
Assuming the 90 days horizon PT Bayan Resources is expected to generate 1.52 times more return on investment than Regions Financial. However, PT Bayan is 1.52 times more volatile than Regions Financial. It trades about 0.21 of its potential returns per unit of risk. Regions Financial is currently generating about 0.31 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 Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
PT Bayan Resources vs. Regions Financial
Performance |
| Timeline |
| PT Bayan Resources |
| Regions Financial |
PT Bayan and Regions Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bayan and Regions Financial
The main advantage of trading using opposite PT Bayan and Regions Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bayan position performs unexpectedly, Regions Financial 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 Regions Financial will offset losses from the drop in Regions Financial'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 |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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