Correlation Between Bayan Resources and Trisula International
Can any of the company-specific risk be diversified away by investing in both Bayan Resources and Trisula International 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 Trisula International 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 Trisula International Tbk, you can compare the effects of market volatilities on Bayan Resources and Trisula International 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 Trisula International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayan Resources and Trisula International.
Diversification Opportunities for Bayan Resources and Trisula International
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bayan and Trisula is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Bayan Resources Tbk and Trisula International Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trisula International 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 Trisula International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trisula International Tbk has no effect on the direction of Bayan Resources i.e., Bayan Resources and Trisula International go up and down completely randomly.
Pair Corralation between Bayan Resources and Trisula International
Assuming the 90 days trading horizon Bayan Resources Tbk is expected to generate 0.51 times more return on investment than Trisula International. However, Bayan Resources Tbk is 1.97 times less risky than Trisula International. It trades about 0.02 of its potential returns per unit of risk. Trisula International Tbk is currently generating about 0.01 per unit of risk. If you would invest 1,821,198 in Bayan Resources Tbk on November 2, 2024 and sell it today you would earn a total of 211,302 from holding Bayan Resources Tbk or generate 11.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Bayan Resources Tbk vs. Trisula International Tbk
Performance |
| Timeline |
| Bayan Resources Tbk |
| Trisula International Tbk |
Bayan Resources and Trisula International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayan Resources and Trisula International
The main advantage of trading using opposite Bayan Resources and Trisula International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayan Resources position performs unexpectedly, Trisula International 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 Trisula International will offset losses from the drop in Trisula International's long position.| Bayan Resources vs. Indo Tambangraya Megah | Bayan Resources vs. Indika Energy Tbk | Bayan Resources vs. Darma Henwa Tbk | Bayan Resources vs. Harum Energy Tbk |
| Trisula International vs. PT Buana Artha | Trisula International vs. Tifico Fiber Indonesia | Trisula International vs. Voksel Electric Tbk | Trisula International vs. Sunson Textile Manufacturer |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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