Correlation Between Bayan Resources and Indorama Synthetics
Can any of the company-specific risk be diversified away by investing in both Bayan Resources and Indorama Synthetics 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 Indorama Synthetics 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 Indorama Synthetics Tbk, you can compare the effects of market volatilities on Bayan Resources and Indorama Synthetics 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 Indorama Synthetics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayan Resources and Indorama Synthetics.
Diversification Opportunities for Bayan Resources and Indorama Synthetics
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bayan and Indorama is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Bayan Resources Tbk and Indorama Synthetics Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indorama Synthetics 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 Indorama Synthetics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indorama Synthetics Tbk has no effect on the direction of Bayan Resources i.e., Bayan Resources and Indorama Synthetics go up and down completely randomly.
Pair Corralation between Bayan Resources and Indorama Synthetics
Assuming the 90 days trading horizon Bayan Resources Tbk is expected to generate 0.91 times more return on investment than Indorama Synthetics. However, Bayan Resources Tbk is 1.1 times less risky than Indorama Synthetics. It trades about 0.07 of its potential returns per unit of risk. Indorama Synthetics Tbk is currently generating about -0.04 per unit of risk. If you would invest 1,330,881 in Bayan Resources Tbk on August 31, 2024 and sell it today you would earn a total of 626,619 from holding Bayan Resources Tbk or generate 47.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bayan Resources Tbk vs. Indorama Synthetics Tbk
Performance |
| Timeline |
| Bayan Resources Tbk |
| Indorama Synthetics Tbk |
Bayan Resources and Indorama Synthetics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayan Resources and Indorama Synthetics
The main advantage of trading using opposite Bayan Resources and Indorama Synthetics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayan Resources position performs unexpectedly, Indorama Synthetics 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 Indorama Synthetics will offset losses from the drop in Indorama Synthetics' long position.| Bayan Resources vs. Mitrabahtera Segara Sejati | Bayan Resources vs. Weha Transportasi Indonesia | Bayan Resources vs. Rig Tenders Tbk | Bayan Resources vs. Rukun Raharja Tbk |
| Indorama Synthetics vs. Japfa Comfeed Indonesia | Indorama Synthetics vs. Charoen Pokphand Indonesia | Indorama Synthetics vs. Erajaya Swasembada Tbk | Indorama Synthetics vs. Indofood Cbp Sukses |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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