Correlation Between Amazon and BANK MANDIRI
Can any of the company-specific risk be diversified away by investing in both Amazon 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 Amazon and BANK MANDIRI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and BANK MANDIRI, you can compare the effects of market volatilities on Amazon 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 Amazon with a short position of BANK MANDIRI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and BANK MANDIRI.
Diversification Opportunities for Amazon and BANK MANDIRI
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Amazon and BANK is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and BANK MANDIRI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK MANDIRI and Amazon 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 Amazon Inc 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 Amazon i.e., Amazon and BANK MANDIRI go up and down completely randomly.
Pair Corralation between Amazon and BANK MANDIRI
Assuming the 90 days trading horizon Amazon Inc is expected to generate 0.23 times more return on investment than BANK MANDIRI. However, Amazon Inc is 4.4 times less risky than BANK MANDIRI. It trades about 0.26 of its potential returns per unit of risk. BANK MANDIRI is currently generating about 0.01 per unit of risk. If you would invest 19,010 in Amazon Inc on October 19, 2024 and sell it today you would earn a total of 2,910 from holding Amazon Inc or generate 15.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon Inc vs. BANK MANDIRI
Performance |
| Timeline |
| Amazon Inc |
| BANK MANDIRI |
Amazon and BANK MANDIRI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and BANK MANDIRI
The main advantage of trading using opposite Amazon and BANK MANDIRI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon 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.| Amazon vs. Micron Technology | Amazon vs. Kingdee International Software | Amazon vs. Easy Software AG | Amazon vs. The Home Depot |
| BANK MANDIRI vs. Discover Financial Services | BANK MANDIRI vs. Synovus Financial Corp | BANK MANDIRI vs. CITY OFFICE REIT | BANK MANDIRI vs. Synchrony Financial |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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