Correlation Between G-III Apparel and PT Bayan
Can any of the company-specific risk be diversified away by investing in both G-III Apparel and PT Bayan 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 G-III Apparel and PT Bayan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G III Apparel Group and PT Bayan Resources, you can compare the effects of market volatilities on G-III Apparel and PT Bayan 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 G-III Apparel with a short position of PT Bayan. Check out your portfolio center. Please also check ongoing floating volatility patterns of G-III Apparel and PT Bayan.
Diversification Opportunities for G-III Apparel and PT Bayan
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between G-III and BNB is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and PT Bayan Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bayan Resources and G-III Apparel 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 G III Apparel Group are associated (or correlated) with PT Bayan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bayan Resources has no effect on the direction of G-III Apparel i.e., G-III Apparel and PT Bayan go up and down completely randomly.
Pair Corralation between G-III Apparel and PT Bayan
Assuming the 90 days horizon G-III Apparel is expected to generate 5.66 times less return on investment than PT Bayan. But when comparing it to its historical volatility, G III Apparel Group is 2.0 times less risky than PT Bayan. It trades about 0.07 of its potential returns per unit of risk. PT Bayan Resources is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 97.00 in PT Bayan Resources on September 5, 2024 and sell it today you would earn a total of 18.00 from holding PT Bayan Resources or generate 18.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
G III Apparel Group vs. PT Bayan Resources
Performance |
| Timeline |
| G III Apparel |
| PT Bayan Resources |
G-III Apparel and PT Bayan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G-III Apparel and PT Bayan
The main advantage of trading using opposite G-III Apparel and PT Bayan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G-III Apparel position performs unexpectedly, PT Bayan 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 PT Bayan will offset losses from the drop in PT Bayan's long position.The idea behind G III Apparel Group and PT Bayan Resources pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| PT Bayan vs. Regions Financial | PT Bayan vs. JD SPORTS FASH | PT Bayan vs. G III Apparel Group | PT Bayan vs. ANTA SPORTS PRODUCT |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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