Correlation Between Bayan Resources and Arkha Jayanti
Can any of the company-specific risk be diversified away by investing in both Bayan Resources and Arkha Jayanti 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 Arkha Jayanti 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 Arkha Jayanti Persada, you can compare the effects of market volatilities on Bayan Resources and Arkha Jayanti 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 Arkha Jayanti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayan Resources and Arkha Jayanti.
Diversification Opportunities for Bayan Resources and Arkha Jayanti
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bayan and Arkha is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Bayan Resources Tbk and Arkha Jayanti Persada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arkha Jayanti Persada 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 Arkha Jayanti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arkha Jayanti Persada has no effect on the direction of Bayan Resources i.e., Bayan Resources and Arkha Jayanti go up and down completely randomly.
Pair Corralation between Bayan Resources and Arkha Jayanti
Assuming the 90 days trading horizon Bayan Resources Tbk is expected to generate 0.57 times more return on investment than Arkha Jayanti. However, Bayan Resources Tbk is 1.74 times less risky than Arkha Jayanti. It trades about 0.02 of its potential returns per unit of risk. Arkha Jayanti Persada is currently generating about -0.03 per unit of risk. If you would invest 1,739,293 in Bayan Resources Tbk on September 12, 2024 and sell it today you would earn a total of 260,707 from holding Bayan Resources Tbk or generate 14.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bayan Resources Tbk vs. Arkha Jayanti Persada
Performance |
| Timeline |
| Bayan Resources Tbk |
| Arkha Jayanti Persada |
Bayan Resources and Arkha Jayanti Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayan Resources and Arkha Jayanti
The main advantage of trading using opposite Bayan Resources and Arkha Jayanti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayan Resources position performs unexpectedly, Arkha Jayanti 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 Arkha Jayanti will offset losses from the drop in Arkha Jayanti'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 |
| Arkha Jayanti vs. Berkah Prima Perkasa | Arkha Jayanti vs. Jasnita Telekomindo Tbk | Arkha Jayanti vs. Darmi Bersaudara Tbk | Arkha Jayanti vs. Agro Yasa Lestari |
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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