Correlation Between BANK MANDIRI and RATIONAL UNADR
Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI and RATIONAL UNADR 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 RATIONAL UNADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK MANDIRI and RATIONAL UNADR 1, you can compare the effects of market volatilities on BANK MANDIRI and RATIONAL UNADR 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 RATIONAL UNADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and RATIONAL UNADR.
Diversification Opportunities for BANK MANDIRI and RATIONAL UNADR
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BANK and RATIONAL is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and RATIONAL UNADR 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RATIONAL UNADR 1 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 RATIONAL UNADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RATIONAL UNADR 1 has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and RATIONAL UNADR go up and down completely randomly.
Pair Corralation between BANK MANDIRI and RATIONAL UNADR
Assuming the 90 days trading horizon BANK MANDIRI is expected to under-perform the RATIONAL UNADR. In addition to that, BANK MANDIRI is 1.81 times more volatile than RATIONAL UNADR 1. It trades about -0.13 of its total potential returns per unit of risk. RATIONAL UNADR 1 is currently generating about -0.06 per unit of volatility. If you would invest 4,320 in RATIONAL UNADR 1 on September 26, 2024 and sell it today you would lose (280.00) from holding RATIONAL UNADR 1 or give up 6.48% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
BANK MANDIRI vs. RATIONAL UNADR 1
Performance |
Timeline |
BANK MANDIRI |
RATIONAL UNADR 1 |
BANK MANDIRI and RATIONAL UNADR Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BANK MANDIRI and RATIONAL UNADR
The main advantage of trading using opposite BANK MANDIRI and RATIONAL UNADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK MANDIRI position performs unexpectedly, RATIONAL UNADR 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 RATIONAL UNADR will offset losses from the drop in RATIONAL UNADR's long position.BANK MANDIRI vs. Apple Inc | BANK MANDIRI vs. Apple Inc | BANK MANDIRI vs. Microsoft | BANK MANDIRI vs. Microsoft |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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