Correlation Between M/I Homes and BANK MANDIRI
Can any of the company-specific risk be diversified away by investing in both M/I Homes and BANK MANDIRI 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 M/I Homes and BANK MANDIRI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MI Homes and BANK MANDIRI, you can compare the effects of market volatilities on M/I Homes and BANK MANDIRI 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 M/I Homes with a short position of BANK MANDIRI. Check out your portfolio center. Please also check ongoing floating volatility patterns of M/I Homes and BANK MANDIRI.
Diversification Opportunities for M/I Homes and BANK MANDIRI
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between M/I and BANK is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding MI Homes and BANK MANDIRI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK MANDIRI and M/I Homes 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 MI Homes are associated (or correlated) with BANK MANDIRI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK MANDIRI has no effect on the direction of M/I Homes i.e., M/I Homes and BANK MANDIRI go up and down completely randomly.
Pair Corralation between M/I Homes and BANK MANDIRI
Assuming the 90 days horizon MI Homes is expected to generate 1.02 times more return on investment than BANK MANDIRI. However, M/I Homes is 1.02 times more volatile than BANK MANDIRI. It trades about 0.11 of its potential returns per unit of risk. BANK MANDIRI is currently generating about 0.03 per unit of risk. If you would invest 7,700 in MI Homes on August 25, 2024 and sell it today you would earn a total of 6,870 from holding MI Homes or generate 89.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.64% |
| Values | Daily Returns |
MI Homes vs. BANK MANDIRI
Performance |
| Timeline |
| M/I Homes |
| BANK MANDIRI |
M/I Homes and BANK MANDIRI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with M/I Homes and BANK MANDIRI
The main advantage of trading using opposite M/I Homes and BANK MANDIRI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if M/I Homes position performs unexpectedly, BANK MANDIRI 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 BANK MANDIRI will offset losses from the drop in BANK MANDIRI's long position.| M/I Homes vs. Japan Tobacco | M/I Homes vs. Tradeweb Markets | M/I Homes vs. NEWELL RUBBERMAID | M/I Homes vs. Summit Materials |
| BANK MANDIRI vs. MI Homes | BANK MANDIRI vs. PennantPark Investment | BANK MANDIRI vs. WisdomTree Investments | BANK MANDIRI vs. Autohome ADR |
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..
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