Correlation Between Dian Swastatika and Bayan Resources
Can any of the company-specific risk be diversified away by investing in both Dian Swastatika 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 Dian Swastatika and Bayan Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dian Swastatika Sentosa and Bayan Resources Tbk, you can compare the effects of market volatilities on Dian Swastatika 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 Dian Swastatika with a short position of Bayan Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dian Swastatika and Bayan Resources.
Diversification Opportunities for Dian Swastatika and Bayan Resources
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dian and Bayan is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Dian Swastatika Sentosa 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 Dian Swastatika 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 Dian Swastatika Sentosa 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 Dian Swastatika i.e., Dian Swastatika and Bayan Resources go up and down completely randomly.
Pair Corralation between Dian Swastatika and Bayan Resources
Assuming the 90 days trading horizon Dian Swastatika Sentosa is expected to generate 23.69 times more return on investment than Bayan Resources. However, Dian Swastatika is 23.69 times more volatile than Bayan Resources Tbk. It trades about 0.05 of its potential returns per unit of risk. Bayan Resources Tbk is currently generating about 0.02 per unit of risk. If you would invest 380,000 in Dian Swastatika Sentosa on November 5, 2024 and sell it today you would earn a total of 4,107,500 from holding Dian Swastatika Sentosa or generate 1080.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Dian Swastatika Sentosa vs. Bayan Resources Tbk
Performance |
| Timeline |
| Dian Swastatika Sentosa |
| Bayan Resources Tbk |
Dian Swastatika and Bayan Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dian Swastatika and Bayan Resources
The main advantage of trading using opposite Dian Swastatika and Bayan Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dian Swastatika 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.| Dian Swastatika vs. Bayan Resources Tbk | Dian Swastatika vs. Indoritel Makmur Internasional | Dian Swastatika vs. Duta Pertiwi Tbk | Dian Swastatika vs. Enseval Putra Megatrading |
| Bayan Resources vs. Indo Tambangraya Megah | Bayan Resources vs. Indika Energy Tbk | Bayan Resources vs. Darma Henwa Tbk | Bayan Resources vs. Harum Energy 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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