Correlation Between Peabody Energy and PT Bayan
Can any of the company-specific risk be diversified away by investing in both Peabody Energy 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 Peabody Energy and PT Bayan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peabody Energy and PT Bayan Resources, you can compare the effects of market volatilities on Peabody Energy 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 Peabody Energy with a short position of PT Bayan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peabody Energy and PT Bayan.
Diversification Opportunities for Peabody Energy and PT Bayan
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Peabody and BNB is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Peabody Energy 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 Peabody Energy 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 Peabody Energy 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 Peabody Energy i.e., Peabody Energy and PT Bayan go up and down completely randomly.
Pair Corralation between Peabody Energy and PT Bayan
Assuming the 90 days horizon Peabody Energy is expected to under-perform the PT Bayan. But the stock apears to be less risky and, when comparing its historical volatility, Peabody Energy is 1.69 times less risky than PT Bayan. The stock trades about -0.42 of its potential returns per unit of risk. The PT Bayan Resources is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 103.00 in PT Bayan Resources on September 12, 2024 and sell it today you would earn a total of 14.00 from holding PT Bayan Resources or generate 13.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peabody Energy vs. PT Bayan Resources
Performance |
| Timeline |
| Peabody Energy |
| PT Bayan Resources |
Peabody Energy and PT Bayan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peabody Energy and PT Bayan
The main advantage of trading using opposite Peabody Energy and PT Bayan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peabody Energy 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.| Peabody Energy vs. INVITATION HOMES DL | Peabody Energy vs. Xinhua Winshare Publishing | Peabody Energy vs. Grand Canyon Education | Peabody Energy vs. G8 EDUCATION |
| PT Bayan vs. Verizon Communications | PT Bayan vs. American Airlines Group | PT Bayan vs. SINGAPORE AIRLINES | PT Bayan vs. Gol Intelligent Airlines |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |