Correlation Between Bayan Resources and Ciptadana Asset
Can any of the company-specific risk be diversified away by investing in both Bayan Resources and Ciptadana Asset 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 Ciptadana Asset 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 Ciptadana Asset Management, you can compare the effects of market volatilities on Bayan Resources and Ciptadana Asset 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 Ciptadana Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayan Resources and Ciptadana Asset.
Diversification Opportunities for Bayan Resources and Ciptadana Asset
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bayan and Ciptadana is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Bayan Resources Tbk and Ciptadana Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ciptadana Asset Mana 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 Ciptadana Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ciptadana Asset Mana has no effect on the direction of Bayan Resources i.e., Bayan Resources and Ciptadana Asset go up and down completely randomly.
Pair Corralation between Bayan Resources and Ciptadana Asset
Assuming the 90 days trading horizon Bayan Resources Tbk is expected to generate 0.39 times more return on investment than Ciptadana Asset. However, Bayan Resources Tbk is 2.55 times less risky than Ciptadana Asset. It trades about 0.38 of its potential returns per unit of risk. Ciptadana Asset Management is currently generating about 0.06 per unit of risk. If you would invest 1,717,500 in Bayan Resources Tbk on August 27, 2024 and sell it today you would earn a total of 180,000 from holding Bayan Resources Tbk or generate 10.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bayan Resources Tbk vs. Ciptadana Asset Management
Performance |
| Timeline |
| Bayan Resources Tbk |
| Ciptadana Asset Mana |
Bayan Resources and Ciptadana Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayan Resources and Ciptadana Asset
The main advantage of trading using opposite Bayan Resources and Ciptadana Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayan Resources position performs unexpectedly, Ciptadana Asset 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 Ciptadana Asset will offset losses from the drop in Ciptadana Asset'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 |
| Ciptadana Asset vs. Ashmore Asset Management | Ciptadana Asset vs. Victoria Insurance Tbk | Ciptadana Asset vs. Gunawan Dianjaya Steel | Ciptadana Asset vs. Humpuss Intermoda Transportasi |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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