Correlation Between Ace Hardware and Bank Mandiri
Can any of the company-specific risk be diversified away by investing in both Ace Hardware 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 Ace Hardware and Bank Mandiri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ace Hardware Indonesia and Bank Mandiri Persero, you can compare the effects of market volatilities on Ace Hardware 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 Ace Hardware with a short position of Bank Mandiri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ace Hardware and Bank Mandiri.
Diversification Opportunities for Ace Hardware and Bank Mandiri
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ace and Bank is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ace Hardware Indonesia and Bank Mandiri Persero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Mandiri Persero and Ace Hardware 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 Ace Hardware Indonesia 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 Persero has no effect on the direction of Ace Hardware i.e., Ace Hardware and Bank Mandiri go up and down completely randomly.
Pair Corralation between Ace Hardware and Bank Mandiri
Assuming the 90 days trading horizon Ace Hardware Indonesia is expected to under-perform the Bank Mandiri. But the stock apears to be less risky and, when comparing its historical volatility, Ace Hardware Indonesia is 1.0 times less risky than Bank Mandiri. The stock trades about -0.31 of its potential returns per unit of risk. The Bank Mandiri Persero is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 675,000 in Bank Mandiri Persero on August 31, 2024 and sell it today you would lose (22,500) from holding Bank Mandiri Persero or give up 3.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ace Hardware Indonesia vs. Bank Mandiri Persero
Performance |
| Timeline |
| Ace Hardware Indonesia |
| Bank Mandiri Persero |
Ace Hardware and Bank Mandiri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ace Hardware and Bank Mandiri
The main advantage of trading using opposite Ace Hardware and Bank Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ace Hardware 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.| Ace Hardware vs. Japfa Comfeed Indonesia | Ace Hardware vs. Charoen Pokphand Indonesia | Ace Hardware vs. Erajaya Swasembada Tbk | Ace Hardware vs. Indofood Cbp Sukses |
| Bank Mandiri vs. Bank BRISyariah Tbk | Bank Mandiri vs. Ace Hardware Indonesia | Bank Mandiri vs. Merdeka Copper Gold | Bank Mandiri vs. Mitra Pinasthika Mustika |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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