Correlation Between Bayan Resources and Bank Maybank
Can any of the company-specific risk be diversified away by investing in both Bayan Resources and Bank Maybank 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 Bank Maybank 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 Bank Maybank Indonesia, you can compare the effects of market volatilities on Bayan Resources and Bank Maybank 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 Bank Maybank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayan Resources and Bank Maybank.
Diversification Opportunities for Bayan Resources and Bank Maybank
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bayan and Bank is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Bayan Resources Tbk and Bank Maybank Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Maybank Indonesia 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 Bank Maybank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Maybank Indonesia has no effect on the direction of Bayan Resources i.e., Bayan Resources and Bank Maybank go up and down completely randomly.
Pair Corralation between Bayan Resources and Bank Maybank
Assuming the 90 days trading horizon Bayan Resources Tbk is expected to generate 1.44 times more return on investment than Bank Maybank. However, Bayan Resources is 1.44 times more volatile than Bank Maybank Indonesia. It trades about 0.05 of its potential returns per unit of risk. Bank Maybank Indonesia is currently generating about 0.01 per unit of risk. If you would invest 1,227,529 in Bayan Resources Tbk on September 3, 2024 and sell it today you would earn a total of 729,971 from holding Bayan Resources Tbk or generate 59.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Bayan Resources Tbk vs. Bank Maybank Indonesia
Performance |
| Timeline |
| Bayan Resources Tbk |
| Bank Maybank Indonesia |
Bayan Resources and Bank Maybank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayan Resources and Bank Maybank
The main advantage of trading using opposite Bayan Resources and Bank Maybank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayan Resources position performs unexpectedly, Bank Maybank 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 Bank Maybank will offset losses from the drop in Bank Maybank'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 |
| Bank Maybank vs. Paninvest Tbk | Bank Maybank vs. Mitra Pinasthika Mustika | Bank Maybank vs. Jakarta Int Hotels | Bank Maybank vs. Asuransi Harta Aman |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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