Correlation Between Bayan Resources and Multi Makmur
Can any of the company-specific risk be diversified away by investing in both Bayan Resources and Multi Makmur 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 Multi Makmur 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 Multi Makmur Lemindo, you can compare the effects of market volatilities on Bayan Resources and Multi Makmur 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 Multi Makmur. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayan Resources and Multi Makmur.
Diversification Opportunities for Bayan Resources and Multi Makmur
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bayan and Multi is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Bayan Resources Tbk and Multi Makmur Lemindo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Makmur Lemindo 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 Multi Makmur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Makmur Lemindo has no effect on the direction of Bayan Resources i.e., Bayan Resources and Multi Makmur go up and down completely randomly.
Pair Corralation between Bayan Resources and Multi Makmur
Assuming the 90 days trading horizon Bayan Resources Tbk is expected to generate 0.23 times more return on investment than Multi Makmur. However, Bayan Resources Tbk is 4.29 times less risky than Multi Makmur. It trades about 0.18 of its potential returns per unit of risk. Multi Makmur Lemindo 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. Multi Makmur Lemindo
Performance |
| Timeline |
| Bayan Resources Tbk |
| Multi Makmur Lemindo |
Bayan Resources and Multi Makmur Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayan Resources and Multi Makmur
The main advantage of trading using opposite Bayan Resources and Multi Makmur positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayan Resources position performs unexpectedly, Multi Makmur 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 Multi Makmur will offset losses from the drop in Multi Makmur's long position.| Bayan Resources vs. Mitrabahtera Segara Sejati | Bayan Resources vs. Weha Transportasi Indonesia | Bayan Resources vs. Rig Tenders Tbk |
| Multi Makmur vs. Ashmore Asset Management | Multi Makmur vs. PT Boston Furniture | Multi Makmur vs. Indo Acidatama Tbk | Multi Makmur vs. PT Charlie Hospital |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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