Correlation Between Resource Alam and Bayan Resources
Can any of the company-specific risk be diversified away by investing in both Resource Alam 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 Resource Alam and Bayan Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Resource Alam Indonesia and Bayan Resources Tbk, you can compare the effects of market volatilities on Resource Alam 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 Resource Alam with a short position of Bayan Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Resource Alam and Bayan Resources.
Diversification Opportunities for Resource Alam and Bayan Resources
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Resource and Bayan is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Resource Alam Indonesia 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 Resource Alam 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 Resource Alam Indonesia 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 Resource Alam i.e., Resource Alam and Bayan Resources go up and down completely randomly.
Pair Corralation between Resource Alam and Bayan Resources
Assuming the 90 days trading horizon Resource Alam is expected to generate 34.34 times less return on investment than Bayan Resources. In addition to that, Resource Alam is 1.36 times more volatile than Bayan Resources Tbk. It trades about 0.01 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 1,780,000 in Bayan Resources Tbk on September 13, 2024 and sell it today you would earn a total of 287,500 from holding Bayan Resources Tbk or generate 16.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Resource Alam Indonesia vs. Bayan Resources Tbk
Performance |
| Timeline |
| Resource Alam Indonesia |
| Bayan Resources Tbk |
Resource Alam and Bayan Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Resource Alam and Bayan Resources
The main advantage of trading using opposite Resource Alam and Bayan Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Resource Alam 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.| Resource Alam vs. Petrosea Tbk | Resource Alam vs. Harum Energy Tbk | Resource Alam vs. Perdana Karya Perkasa | Resource Alam vs. Bayan Resources Tbk |
| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Transaction History View history of all your transactions and understand their impact on performance |