Correlation Between CAREER EDUCATION and BANK MANDIRI
Can any of the company-specific risk be diversified away by investing in both CAREER EDUCATION 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 CAREER EDUCATION and BANK MANDIRI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAREER EDUCATION and BANK MANDIRI, you can compare the effects of market volatilities on CAREER EDUCATION 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 CAREER EDUCATION with a short position of BANK MANDIRI. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAREER EDUCATION and BANK MANDIRI.
Diversification Opportunities for CAREER EDUCATION and BANK MANDIRI
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CAREER and BANK is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding CAREER EDUCATION and BANK MANDIRI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK MANDIRI and CAREER EDUCATION 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 CAREER EDUCATION 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 CAREER EDUCATION i.e., CAREER EDUCATION and BANK MANDIRI go up and down completely randomly.
Pair Corralation between CAREER EDUCATION and BANK MANDIRI
Assuming the 90 days trading horizon CAREER EDUCATION is expected to generate 0.2 times more return on investment than BANK MANDIRI. However, CAREER EDUCATION is 4.94 times less risky than BANK MANDIRI. It trades about -0.07 of its potential returns per unit of risk. BANK MANDIRI is currently generating about -0.04 per unit of risk. If you would invest 2,600 in CAREER EDUCATION on October 12, 2024 and sell it today you would lose (60.00) from holding CAREER EDUCATION or give up 2.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAREER EDUCATION vs. BANK MANDIRI
Performance |
| Timeline |
| CAREER EDUCATION |
| BANK MANDIRI |
CAREER EDUCATION and BANK MANDIRI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAREER EDUCATION and BANK MANDIRI
The main advantage of trading using opposite CAREER EDUCATION and BANK MANDIRI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAREER EDUCATION 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.| CAREER EDUCATION vs. Spirent Communications plc | CAREER EDUCATION vs. FIH MOBILE | CAREER EDUCATION vs. FAST RETAIL ADR | CAREER EDUCATION vs. MARKET VECTR RETAIL |
| BANK MANDIRI vs. CAREER EDUCATION | BANK MANDIRI vs. DeVry Education Group | BANK MANDIRI vs. American Public Education | BANK MANDIRI vs. Adtalem Global Education |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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