Correlation Between Bayan Resources and Abm Investama
Can any of the company-specific risk be diversified away by investing in both Bayan Resources and Abm Investama 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 Bayan Resources and Abm Investama into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bayan Resources Tbk and Abm Investama Tbk, you can compare the effects of market volatilities on Bayan Resources and Abm Investama 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 Bayan Resources with a short position of Abm Investama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayan Resources and Abm Investama.
Diversification Opportunities for Bayan Resources and Abm Investama
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bayan and Abm is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Bayan Resources Tbk and Abm Investama Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abm Investama Tbk and Bayan Resources 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 Bayan Resources Tbk are associated (or correlated) with Abm Investama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abm Investama Tbk has no effect on the direction of Bayan Resources i.e., Bayan Resources and Abm Investama go up and down completely randomly.
Pair Corralation between Bayan Resources and Abm Investama
Assuming the 90 days trading horizon Bayan Resources Tbk is expected to generate 1.12 times more return on investment than Abm Investama. However, Bayan Resources is 1.12 times more volatile than Abm Investama Tbk. It trades about 0.05 of its potential returns per unit of risk. Abm Investama Tbk is currently generating about 0.04 per unit of risk. If you would invest 1,262,468 in Bayan Resources Tbk on August 30, 2024 and sell it today you would earn a total of 697,532 from holding Bayan Resources Tbk or generate 55.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bayan Resources Tbk vs. Abm Investama Tbk
Performance |
| Timeline |
| Bayan Resources Tbk |
| Abm Investama Tbk |
Bayan Resources and Abm Investama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayan Resources and Abm Investama
The main advantage of trading using opposite Bayan Resources and Abm Investama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayan Resources position performs unexpectedly, Abm Investama 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 Abm Investama will offset losses from the drop in Abm Investama's long position.| Bayan Resources vs. Indo Tambangraya Megah | Bayan Resources vs. Indika Energy Tbk | Bayan Resources vs. Darma Henwa Tbk | Bayan Resources vs. Harum Energy Tbk |
| Abm Investama vs. Baramulti Suksessarana Tbk | Abm Investama vs. Mitrabara Adiperdana PT | Abm Investama vs. Sumber Alfaria Trijaya | Abm Investama vs. Surya Esa Perkasa |
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 Stocks Directory module to find actively traded stocks across global markets.
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