Correlation Between Bayan Resources and Kresna Graha
Can any of the company-specific risk be diversified away by investing in both Bayan Resources and Kresna Graha 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 Kresna Graha 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 Kresna Graha Investama, you can compare the effects of market volatilities on Bayan Resources and Kresna Graha 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 Kresna Graha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayan Resources and Kresna Graha.
Diversification Opportunities for Bayan Resources and Kresna Graha
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bayan and Kresna is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Bayan Resources Tbk and Kresna Graha Investama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kresna Graha Investama 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 Kresna Graha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kresna Graha Investama has no effect on the direction of Bayan Resources i.e., Bayan Resources and Kresna Graha go up and down completely randomly.
Pair Corralation between Bayan Resources and Kresna Graha
Assuming the 90 days trading horizon Bayan Resources Tbk is expected to generate 0.17 times more return on investment than Kresna Graha. However, Bayan Resources Tbk is 5.82 times less risky than Kresna Graha. It trades about 0.43 of its potential returns per unit of risk. Kresna Graha Investama is currently generating about -0.11 per unit of risk. If you would invest 1,715,000 in Bayan Resources Tbk on August 31, 2024 and sell it today you would earn a total of 242,500 from holding Bayan Resources Tbk or generate 14.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bayan Resources Tbk vs. Kresna Graha Investama
Performance |
| Timeline |
| Bayan Resources Tbk |
| Kresna Graha Investama |
Bayan Resources and Kresna Graha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayan Resources and Kresna Graha
The main advantage of trading using opposite Bayan Resources and Kresna Graha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayan Resources position performs unexpectedly, Kresna Graha 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 Kresna Graha will offset losses from the drop in Kresna Graha's 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 |
| Kresna Graha vs. Mnc Land Tbk | Kresna Graha vs. Nusantara Infrastructure Tbk | Kresna Graha vs. Lenox Pasifik Investama | Kresna Graha vs. Mandala Multifinance Tbk |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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