Correlation Between Bayan Resources and Protech Mitra
Can any of the company-specific risk be diversified away by investing in both Bayan Resources and Protech Mitra 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 Protech Mitra 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 Protech Mitra Perkasa, you can compare the effects of market volatilities on Bayan Resources and Protech Mitra 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 Protech Mitra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayan Resources and Protech Mitra.
Diversification Opportunities for Bayan Resources and Protech Mitra
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bayan and Protech is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Bayan Resources Tbk and Protech Mitra Perkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protech Mitra Perkasa 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 Protech Mitra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protech Mitra Perkasa has no effect on the direction of Bayan Resources i.e., Bayan Resources and Protech Mitra go up and down completely randomly.
Pair Corralation between Bayan Resources and Protech Mitra
Assuming the 90 days trading horizon Bayan Resources Tbk is expected to generate 0.61 times more return on investment than Protech Mitra. However, Bayan Resources Tbk is 1.65 times less risky than Protech Mitra. It trades about 0.18 of its potential returns per unit of risk. Protech Mitra Perkasa is currently generating about -0.05 per unit of risk. If you would invest 1,680,000 in Bayan Resources Tbk on September 2, 2024 and sell it today you would earn a total of 277,500 from holding Bayan Resources Tbk or generate 16.52% 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. Protech Mitra Perkasa
Performance |
| Timeline |
| Bayan Resources Tbk |
| Protech Mitra Perkasa |
Bayan Resources and Protech Mitra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayan Resources and Protech Mitra
The main advantage of trading using opposite Bayan Resources and Protech Mitra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayan Resources position performs unexpectedly, Protech Mitra 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 Protech Mitra will offset losses from the drop in Protech Mitra's long position.| Bayan Resources vs. Mitrabahtera Segara Sejati | Bayan Resources vs. Weha Transportasi Indonesia | Bayan Resources vs. Rig Tenders Tbk |
| Protech Mitra vs. Matahari Department Store | Protech Mitra vs. Multi Medika Internasional | Protech Mitra vs. Visi Media Asia | Protech Mitra vs. Bayan Resources 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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