Correlation Between GUARDANT HEALTH and BANK MANDIRI
Can any of the company-specific risk be diversified away by investing in both GUARDANT HEALTH 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 GUARDANT HEALTH and BANK MANDIRI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GUARDANT HEALTH CL and BANK MANDIRI, you can compare the effects of market volatilities on GUARDANT HEALTH 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 GUARDANT HEALTH with a short position of BANK MANDIRI. Check out your portfolio center. Please also check ongoing floating volatility patterns of GUARDANT HEALTH and BANK MANDIRI.
Diversification Opportunities for GUARDANT HEALTH and BANK MANDIRI
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GUARDANT and BANK is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding GUARDANT HEALTH CL and BANK MANDIRI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK MANDIRI and GUARDANT HEALTH 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 GUARDANT HEALTH CL 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 GUARDANT HEALTH i.e., GUARDANT HEALTH and BANK MANDIRI go up and down completely randomly.
Pair Corralation between GUARDANT HEALTH and BANK MANDIRI
Assuming the 90 days horizon GUARDANT HEALTH CL is expected to generate 1.8 times more return on investment than BANK MANDIRI. However, GUARDANT HEALTH is 1.8 times more volatile than BANK MANDIRI. It trades about 0.14 of its potential returns per unit of risk. BANK MANDIRI is currently generating about 0.01 per unit of risk. If you would invest 2,650 in GUARDANT HEALTH CL on November 3, 2024 and sell it today you would earn a total of 2,224 from holding GUARDANT HEALTH CL or generate 83.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GUARDANT HEALTH CL vs. BANK MANDIRI
Performance |
| Timeline |
| GUARDANT HEALTH CL |
| BANK MANDIRI |
GUARDANT HEALTH and BANK MANDIRI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GUARDANT HEALTH and BANK MANDIRI
The main advantage of trading using opposite GUARDANT HEALTH and BANK MANDIRI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GUARDANT HEALTH 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.| GUARDANT HEALTH vs. ANGLO ASIAN MINING | GUARDANT HEALTH vs. GRIFFIN MINING LTD | GUARDANT HEALTH vs. International Consolidated Airlines | GUARDANT HEALTH vs. Monument Mining Limited |
| BANK MANDIRI vs. MTY Food Group | BANK MANDIRI vs. Austevoll Seafood ASA | BANK MANDIRI vs. Nomad Foods | BANK MANDIRI vs. Tyson Foods |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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