Correlation Between Delta Dunia and Bayan Resources
Can any of the company-specific risk be diversified away by investing in both Delta Dunia and Bayan Resources 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 Delta Dunia and Bayan Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delta Dunia Makmur and Bayan Resources Tbk, you can compare the effects of market volatilities on Delta Dunia and Bayan Resources 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 Delta Dunia with a short position of Bayan Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Dunia and Bayan Resources.
Diversification Opportunities for Delta Dunia and Bayan Resources
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Delta and Bayan is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Delta Dunia Makmur and Bayan Resources Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayan Resources Tbk and Delta Dunia 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 Delta Dunia Makmur are associated (or correlated) with Bayan Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayan Resources Tbk has no effect on the direction of Delta Dunia i.e., Delta Dunia and Bayan Resources go up and down completely randomly.
Pair Corralation between Delta Dunia and Bayan Resources
Assuming the 90 days trading horizon Delta Dunia Makmur is expected to under-perform the Bayan Resources. In addition to that, Delta Dunia is 2.1 times more volatile than Bayan Resources Tbk. It trades about -0.03 of its total potential returns per unit of risk. Bayan Resources Tbk is currently generating about 0.45 per unit of volatility. If you would invest 1,790,000 in Bayan Resources Tbk on September 14, 2024 and sell it today you would earn a total of 277,500 from holding Bayan Resources Tbk or generate 15.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delta Dunia Makmur vs. Bayan Resources Tbk
Performance |
| Timeline |
| Delta Dunia Makmur |
| Bayan Resources Tbk |
Delta Dunia and Bayan Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Dunia and Bayan Resources
The main advantage of trading using opposite Delta Dunia and Bayan Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Dunia position performs unexpectedly, Bayan Resources 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 Bayan Resources will offset losses from the drop in Bayan Resources' long position.| Delta Dunia vs. Indika Energy Tbk | Delta Dunia vs. Elnusa Tbk | Delta Dunia vs. Harum Energy Tbk | Delta Dunia vs. Energi Mega Persada |
| Bayan Resources vs. Harum Energy Tbk | Bayan Resources vs. Delta Dunia Makmur | Bayan Resources vs. Adi Sarana Armada | Bayan Resources vs. Elang Mahkota Teknologi |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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