Correlation Between Baramulti Suksessarana and Bayan Resources
Can any of the company-specific risk be diversified away by investing in both Baramulti Suksessarana and Bayan Resources 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 Baramulti Suksessarana and Bayan Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baramulti Suksessarana Tbk and Bayan Resources Tbk, you can compare the effects of market volatilities on Baramulti Suksessarana and Bayan Resources 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 Baramulti Suksessarana with a short position of Bayan Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baramulti Suksessarana and Bayan Resources.
Diversification Opportunities for Baramulti Suksessarana and Bayan Resources
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Baramulti and Bayan is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Baramulti Suksessarana Tbk and Bayan Resources Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayan Resources Tbk and Baramulti Suksessarana 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 Baramulti Suksessarana Tbk are associated (or correlated) with Bayan Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayan Resources Tbk has no effect on the direction of Baramulti Suksessarana i.e., Baramulti Suksessarana and Bayan Resources go up and down completely randomly.
Pair Corralation between Baramulti Suksessarana and Bayan Resources
Assuming the 90 days trading horizon Baramulti Suksessarana Tbk is expected to under-perform the Bayan Resources. But the stock apears to be less risky and, when comparing its historical volatility, Baramulti Suksessarana Tbk is 1.05 times less risky than Bayan Resources. The stock trades about -0.23 of its potential returns per unit of risk. The Bayan Resources Tbk is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 1,715,000 in Bayan Resources Tbk on August 31, 2024 and sell it today you would earn a total of 242,500 from holding Bayan Resources Tbk or generate 14.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baramulti Suksessarana Tbk vs. Bayan Resources Tbk
Performance |
| Timeline |
| Baramulti Suksessarana |
| Bayan Resources Tbk |
Baramulti Suksessarana and Bayan Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baramulti Suksessarana and Bayan Resources
The main advantage of trading using opposite Baramulti Suksessarana and Bayan Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baramulti Suksessarana position performs unexpectedly, Bayan Resources 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 Bayan Resources will offset losses from the drop in Bayan Resources' long position.| Baramulti Suksessarana vs. Mitrabara Adiperdana PT | Baramulti Suksessarana vs. Bayan Resources Tbk | Baramulti Suksessarana vs. Abm Investama Tbk | Baramulti Suksessarana vs. TBS Energi Utama |
| Bayan Resources vs. Mitrabahtera Segara Sejati | Bayan Resources vs. Weha Transportasi Indonesia | Bayan Resources vs. Rig Tenders Tbk | Bayan Resources vs. Rukun Raharja 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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