Correlation Between Bayan Resources and Pelita Samudera
Can any of the company-specific risk be diversified away by investing in both Bayan Resources and Pelita Samudera 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 Pelita Samudera 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 Pelita Samudera Shipping, you can compare the effects of market volatilities on Bayan Resources and Pelita Samudera 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 Pelita Samudera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayan Resources and Pelita Samudera.
Diversification Opportunities for Bayan Resources and Pelita Samudera
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bayan and Pelita is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Bayan Resources Tbk and Pelita Samudera Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pelita Samudera Shipping 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 Pelita Samudera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pelita Samudera Shipping has no effect on the direction of Bayan Resources i.e., Bayan Resources and Pelita Samudera go up and down completely randomly.
Pair Corralation between Bayan Resources and Pelita Samudera
Assuming the 90 days trading horizon Bayan Resources Tbk is expected to generate 2.49 times more return on investment than Pelita Samudera. However, Bayan Resources is 2.49 times more volatile than Pelita Samudera Shipping. It trades about 0.41 of its potential returns per unit of risk. Pelita Samudera Shipping is currently generating about -0.14 per unit of risk. If you would invest 1,722,500 in Bayan Resources Tbk on September 2, 2024 and sell it today you would earn a total of 235,000 from holding Bayan Resources Tbk or generate 13.64% 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. Pelita Samudera Shipping
Performance |
| Timeline |
| Bayan Resources Tbk |
| Pelita Samudera Shipping |
Bayan Resources and Pelita Samudera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayan Resources and Pelita Samudera
The main advantage of trading using opposite Bayan Resources and Pelita Samudera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayan Resources position performs unexpectedly, Pelita Samudera 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 Pelita Samudera will offset losses from the drop in Pelita Samudera's long position.| Bayan Resources vs. Mitrabahtera Segara Sejati | Bayan Resources vs. Weha Transportasi Indonesia | Bayan Resources vs. Rig Tenders Tbk |
| Pelita Samudera vs. Matahari Department Store | Pelita Samudera vs. Multi Medika Internasional | Pelita Samudera vs. Visi Media Asia | Pelita Samudera 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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