Correlation Between Matahari Department and Bayan Resources
Can any of the company-specific risk be diversified away by investing in both Matahari Department 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 Matahari Department and Bayan Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matahari Department Store and Bayan Resources Tbk, you can compare the effects of market volatilities on Matahari Department 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 Matahari Department with a short position of Bayan Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matahari Department and Bayan Resources.
Diversification Opportunities for Matahari Department and Bayan Resources
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Matahari and Bayan is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Matahari Department Store 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 Matahari Department 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 Matahari Department Store 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 Matahari Department i.e., Matahari Department and Bayan Resources go up and down completely randomly.
Pair Corralation between Matahari Department and Bayan Resources
Assuming the 90 days trading horizon Matahari Department Store is expected to under-perform the Bayan Resources. In addition to that, Matahari Department is 1.03 times more volatile than Bayan Resources Tbk. It trades about -0.07 of its total potential returns per unit of risk. Bayan Resources Tbk is currently generating about 0.05 per unit of volatility. If you would invest 1,211,224 in Bayan Resources Tbk on September 2, 2024 and sell it today you would earn a total of 746,276 from holding Bayan Resources Tbk or generate 61.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Matahari Department Store vs. Bayan Resources Tbk
Performance |
| Timeline |
| Matahari Department Store |
| Bayan Resources Tbk |
Matahari Department and Bayan Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matahari Department and Bayan Resources
The main advantage of trading using opposite Matahari Department and Bayan Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matahari Department 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.| Matahari Department vs. Japfa Comfeed Indonesia | Matahari Department vs. Charoen Pokphand Indonesia | Matahari Department vs. Erajaya Swasembada Tbk | Matahari Department vs. Indofood Cbp Sukses |
| Bayan Resources vs. Mitrabahtera Segara Sejati | Bayan Resources vs. Weha Transportasi Indonesia | Bayan Resources vs. Rig Tenders 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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