Correlation Between Bayan Resources and Mitrabara Adiperdana
Can any of the company-specific risk be diversified away by investing in both Bayan Resources and Mitrabara Adiperdana 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 Mitrabara Adiperdana 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 Mitrabara Adiperdana PT, you can compare the effects of market volatilities on Bayan Resources and Mitrabara Adiperdana 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 Mitrabara Adiperdana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayan Resources and Mitrabara Adiperdana.
Diversification Opportunities for Bayan Resources and Mitrabara Adiperdana
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bayan and Mitrabara is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Bayan Resources Tbk and Mitrabara Adiperdana PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitrabara Adiperdana 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 Mitrabara Adiperdana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitrabara Adiperdana has no effect on the direction of Bayan Resources i.e., Bayan Resources and Mitrabara Adiperdana go up and down completely randomly.
Pair Corralation between Bayan Resources and Mitrabara Adiperdana
Assuming the 90 days trading horizon Bayan Resources Tbk is expected to generate 1.18 times more return on investment than Mitrabara Adiperdana. However, Bayan Resources is 1.18 times more volatile than Mitrabara Adiperdana PT. It trades about 0.05 of its potential returns per unit of risk. Mitrabara Adiperdana PT is currently generating about -0.05 per unit of risk. If you would invest 1,262,468 in Bayan Resources Tbk on August 30, 2024 and sell it today you would earn a total of 697,532 from holding Bayan Resources Tbk or generate 55.25% 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. Mitrabara Adiperdana PT
Performance |
| Timeline |
| Bayan Resources Tbk |
| Mitrabara Adiperdana |
Bayan Resources and Mitrabara Adiperdana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayan Resources and Mitrabara Adiperdana
The main advantage of trading using opposite Bayan Resources and Mitrabara Adiperdana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayan Resources position performs unexpectedly, Mitrabara Adiperdana 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 Mitrabara Adiperdana will offset losses from the drop in Mitrabara Adiperdana'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 Transaction History module to view history of all your transactions and understand their impact on performance.
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