Correlation Between SOEDER SPORTFISKE and PT Bayan

Can any of the company-specific risk be diversified away by investing in both SOEDER SPORTFISKE 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 SOEDER SPORTFISKE and PT Bayan into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SOEDER SPORTFISKE AB and PT Bayan Resources, you can compare the effects of market volatilities on SOEDER SPORTFISKE 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 SOEDER SPORTFISKE with a short position of PT Bayan. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOEDER SPORTFISKE and PT Bayan.

Diversification Opportunities for SOEDER SPORTFISKE and PT Bayan

-0.6

Correlation Coefficient

SOEDER SPORTFISKE  PT Bayan

Excellent diversification

The 3 months correlation between SOEDER and BNB is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding SOEDER SPORTFISKE AB 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 SOEDER SPORTFISKE 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 SOEDER SPORTFISKE AB 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 SOEDER SPORTFISKE i.e., SOEDER SPORTFISKE and PT Bayan go up and down completely randomly.

Pair Corralation between SOEDER SPORTFISKE and PT Bayan

Assuming the 90 days horizon SOEDER SPORTFISKE AB is expected to generate 1.67 times more return on investment than PT Bayan. However, SOEDER SPORTFISKE is 1.67 times more volatile than PT Bayan Resources. It trades about 0.13 of its potential returns per unit of risk. PT Bayan Resources is currently generating about -0.07 per unit of risk. If you would invest  206.00  in SOEDER SPORTFISKE AB on December 19, 2024 and sell it today you would earn a total of  53.00  from holding SOEDER SPORTFISKE AB or generate 25.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

SOEDER SPORTFISKE AB  vs.  PT Bayan Resources

SOEDER SPORTFISKE

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SOEDER SPORTFISKE AB are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, SOEDER SPORTFISKE reported solid returns over the last few months and may actually be approaching a breakup point.

PT Bayan Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days PT Bayan Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with SOEDER SPORTFISKE and PT Bayan

The main advantage of trading using opposite SOEDER SPORTFISKE and PT Bayan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOEDER SPORTFISKE 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 SOEDER SPORTFISKE AB 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.

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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.