Correlation Between Bayan Resources and Samudera Indonesia
Can any of the company-specific risk be diversified away by investing in both Bayan Resources and Samudera Indonesia 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 Samudera Indonesia 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 Samudera Indonesia Tbk, you can compare the effects of market volatilities on Bayan Resources and Samudera Indonesia 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 Samudera Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayan Resources and Samudera Indonesia.
Diversification Opportunities for Bayan Resources and Samudera Indonesia
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bayan and Samudera is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Bayan Resources Tbk and Samudera Indonesia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samudera Indonesia Tbk 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 Samudera Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samudera Indonesia Tbk has no effect on the direction of Bayan Resources i.e., Bayan Resources and Samudera Indonesia go up and down completely randomly.
Pair Corralation between Bayan Resources and Samudera Indonesia
Assuming the 90 days trading horizon Bayan Resources Tbk is expected to generate 0.87 times more return on investment than Samudera Indonesia. However, Bayan Resources Tbk is 1.15 times less risky than Samudera Indonesia. It trades about 0.41 of its potential returns per unit of risk. Samudera Indonesia Tbk is currently generating about -0.45 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bayan Resources Tbk vs. Samudera Indonesia Tbk
Performance |
| Timeline |
| Bayan Resources Tbk |
| Samudera Indonesia Tbk |
Bayan Resources and Samudera Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayan Resources and Samudera Indonesia
The main advantage of trading using opposite Bayan Resources and Samudera Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayan Resources position performs unexpectedly, Samudera Indonesia 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 Samudera Indonesia will offset losses from the drop in Samudera Indonesia's long position.| Bayan Resources vs. Mitrabahtera Segara Sejati | Bayan Resources vs. Weha Transportasi Indonesia | Bayan Resources vs. Rig Tenders Tbk |
| Samudera Indonesia vs. Matahari Department Store | Samudera Indonesia vs. Multi Medika Internasional | Samudera Indonesia vs. Visi Media Asia | Samudera Indonesia 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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