Correlation Between BANK MANDIRI and NetApp
Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI and NetApp 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 BANK MANDIRI and NetApp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK MANDIRI and NetApp Inc, you can compare the effects of market volatilities on BANK MANDIRI and NetApp 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 BANK MANDIRI with a short position of NetApp. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and NetApp.
Diversification Opportunities for BANK MANDIRI and NetApp
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BANK and NetApp is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and NetApp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetApp Inc and BANK MANDIRI 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 BANK MANDIRI are associated (or correlated) with NetApp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NetApp Inc has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and NetApp go up and down completely randomly.
Pair Corralation between BANK MANDIRI and NetApp
Assuming the 90 days trading horizon BANK MANDIRI is expected to generate 0.84 times more return on investment than NetApp. However, BANK MANDIRI is 1.19 times less risky than NetApp. It trades about 0.01 of its potential returns per unit of risk. NetApp Inc is currently generating about -0.01 per unit of risk. If you would invest 35.00 in BANK MANDIRI on September 24, 2024 and sell it today you would earn a total of 0.00 from holding BANK MANDIRI or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
BANK MANDIRI vs. NetApp Inc
Performance |
Timeline |
BANK MANDIRI |
NetApp Inc |
BANK MANDIRI and NetApp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BANK MANDIRI and NetApp
The main advantage of trading using opposite BANK MANDIRI and NetApp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK MANDIRI position performs unexpectedly, NetApp 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 NetApp will offset losses from the drop in NetApp's long position.BANK MANDIRI vs. Apple Inc | BANK MANDIRI vs. Apple Inc | BANK MANDIRI vs. Apple Inc | BANK MANDIRI vs. Microsoft |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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