Correlation Between Bayan Resources and Sinergi Inti
Can any of the company-specific risk be diversified away by investing in both Bayan Resources and Sinergi Inti 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 Sinergi Inti 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 Sinergi Inti Plastindo, you can compare the effects of market volatilities on Bayan Resources and Sinergi Inti 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 Sinergi Inti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayan Resources and Sinergi Inti.
Diversification Opportunities for Bayan Resources and Sinergi Inti
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bayan and Sinergi is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Bayan Resources Tbk and Sinergi Inti Plastindo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinergi Inti Plastindo 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 Sinergi Inti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinergi Inti Plastindo has no effect on the direction of Bayan Resources i.e., Bayan Resources and Sinergi Inti go up and down completely randomly.
Pair Corralation between Bayan Resources and Sinergi Inti
Assuming the 90 days trading horizon Bayan Resources Tbk is expected to generate 0.28 times more return on investment than Sinergi Inti. However, Bayan Resources Tbk is 3.52 times less risky than Sinergi Inti. It trades about -0.15 of its potential returns per unit of risk. Sinergi Inti Plastindo is currently generating about -0.17 per unit of risk. If you would invest 2,035,000 in Bayan Resources Tbk on December 6, 2024 and sell it today you would lose (60,000) from holding Bayan Resources Tbk or give up 2.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bayan Resources Tbk vs. Sinergi Inti Plastindo
Performance |
| Timeline |
| Bayan Resources Tbk |
| Sinergi Inti Plastindo |
Bayan Resources and Sinergi Inti Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayan Resources and Sinergi Inti
The main advantage of trading using opposite Bayan Resources and Sinergi Inti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayan Resources position performs unexpectedly, Sinergi Inti 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 Sinergi Inti will offset losses from the drop in Sinergi Inti's long position.| Bayan Resources vs. Indo Tambangraya Megah | ||
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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