Correlation Between Bayan Resources and Supra Boga
Can any of the company-specific risk be diversified away by investing in both Bayan Resources and Supra Boga 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 Supra Boga 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 Supra Boga Lestari, you can compare the effects of market volatilities on Bayan Resources and Supra Boga 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 Supra Boga. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayan Resources and Supra Boga.
Diversification Opportunities for Bayan Resources and Supra Boga
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bayan and Supra is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Bayan Resources Tbk and Supra Boga Lestari in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supra Boga Lestari 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 Supra Boga. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supra Boga Lestari has no effect on the direction of Bayan Resources i.e., Bayan Resources and Supra Boga go up and down completely randomly.
Pair Corralation between Bayan Resources and Supra Boga
Assuming the 90 days trading horizon Bayan Resources Tbk is expected to generate 0.87 times more return on investment than Supra Boga. However, Bayan Resources Tbk is 1.15 times less risky than Supra Boga. It trades about 0.43 of its potential returns per unit of risk. Supra Boga Lestari 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. Supra Boga Lestari
Performance |
| Timeline |
| Bayan Resources Tbk |
| Supra Boga Lestari |
Bayan Resources and Supra Boga Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayan Resources and Supra Boga
The main advantage of trading using opposite Bayan Resources and Supra Boga positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayan Resources position performs unexpectedly, Supra Boga 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 Supra Boga will offset losses from the drop in Supra Boga'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 |
| Supra Boga vs. Nippon Indosari Corpindo | Supra Boga vs. Ramayana Lestari Sentosa | Supra Boga vs. Midi Utama Indonesia | Supra Boga vs. Hero Supermarket 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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