Correlation Between Ford and Bank Mestika
Can any of the company-specific risk be diversified away by investing in both Ford and Bank Mestika 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 Ford and Bank Mestika into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Bank Mestika Dharma, you can compare the effects of market volatilities on Ford and Bank Mestika 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 Ford with a short position of Bank Mestika. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Bank Mestika.
Diversification Opportunities for Ford and Bank Mestika
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and Bank is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Bank Mestika Dharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Mestika Dharma and Ford 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 Ford Motor are associated (or correlated) with Bank Mestika. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Mestika Dharma has no effect on the direction of Ford i.e., Ford and Bank Mestika go up and down completely randomly.
Pair Corralation between Ford and Bank Mestika
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.98 times more return on investment than Bank Mestika. However, Ford Motor is 1.02 times less risky than Bank Mestika. It trades about 0.23 of its potential returns per unit of risk. Bank Mestika Dharma is currently generating about 0.09 per unit of risk. If you would invest 1,015 in Ford Motor on September 1, 2024 and sell it today you would earn a total of 98.00 from holding Ford Motor or generate 9.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ford Motor vs. Bank Mestika Dharma
Performance |
| Timeline |
| Ford Motor |
| Bank Mestika Dharma |
Ford and Bank Mestika Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Bank Mestika
The main advantage of trading using opposite Ford and Bank Mestika positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Bank Mestika 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 Mestika will offset losses from the drop in Bank Mestika's long position.The idea behind Ford Motor and Bank Mestika Dharma pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Bank Mestika vs. Bank Maspion Indonesia | Bank Mestika vs. Bank Sinarmas Tbk | Bank Mestika vs. Bank Ina Perdana | Bank Mestika vs. Bank Bumi Arta |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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