Correlation Between Bayan Resources and Dian Swastatika
Can any of the company-specific risk be diversified away by investing in both Bayan Resources and Dian Swastatika 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 Dian Swastatika 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 Dian Swastatika Sentosa, you can compare the effects of market volatilities on Bayan Resources and Dian Swastatika 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 Dian Swastatika. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayan Resources and Dian Swastatika.
Diversification Opportunities for Bayan Resources and Dian Swastatika
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bayan and Dian is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Bayan Resources Tbk and Dian Swastatika Sentosa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dian Swastatika Sentosa 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 Dian Swastatika. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dian Swastatika Sentosa has no effect on the direction of Bayan Resources i.e., Bayan Resources and Dian Swastatika go up and down completely randomly.
Pair Corralation between Bayan Resources and Dian Swastatika
Assuming the 90 days trading horizon Bayan Resources Tbk is expected to under-perform the Dian Swastatika. But the stock apears to be less risky and, when comparing its historical volatility, Bayan Resources Tbk is 2.59 times less risky than Dian Swastatika. The stock trades about -0.05 of its potential returns per unit of risk. The Dian Swastatika Sentosa is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest 3,677,500 in Dian Swastatika Sentosa on November 4, 2024 and sell it today you would earn a total of 810,000 from holding Dian Swastatika Sentosa or generate 22.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bayan Resources Tbk vs. Dian Swastatika Sentosa
Performance |
| Timeline |
| Bayan Resources Tbk |
| Dian Swastatika Sentosa |
Bayan Resources and Dian Swastatika Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayan Resources and Dian Swastatika
The main advantage of trading using opposite Bayan Resources and Dian Swastatika positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayan Resources position performs unexpectedly, Dian Swastatika 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 Dian Swastatika will offset losses from the drop in Dian Swastatika'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 |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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