Correlation Between FEMALE HEALTH and BANK MANDIRI
Can any of the company-specific risk be diversified away by investing in both FEMALE 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 FEMALE 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 FEMALE HEALTH and BANK MANDIRI, you can compare the effects of market volatilities on FEMALE 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 FEMALE HEALTH with a short position of BANK MANDIRI. Check out your portfolio center. Please also check ongoing floating volatility patterns of FEMALE HEALTH and BANK MANDIRI.
Diversification Opportunities for FEMALE HEALTH and BANK MANDIRI
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FEMALE and BANK is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding FEMALE HEALTH and BANK MANDIRI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK MANDIRI and FEMALE 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 FEMALE HEALTH 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 FEMALE HEALTH i.e., FEMALE HEALTH and BANK MANDIRI go up and down completely randomly.
Pair Corralation between FEMALE HEALTH and BANK MANDIRI
Assuming the 90 days trading horizon FEMALE HEALTH is expected to under-perform the BANK MANDIRI. In addition to that, FEMALE HEALTH is 3.29 times more volatile than BANK MANDIRI. It trades about -0.21 of its total potential returns per unit of risk. BANK MANDIRI is currently generating about -0.45 per unit of volatility. If you would invest 36.00 in BANK MANDIRI on November 27, 2024 and sell it today you would lose (11.00) from holding BANK MANDIRI or give up 30.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FEMALE HEALTH vs. BANK MANDIRI
Performance |
| Timeline |
| FEMALE HEALTH |
| BANK MANDIRI |
FEMALE HEALTH and BANK MANDIRI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FEMALE HEALTH and BANK MANDIRI
The main advantage of trading using opposite FEMALE HEALTH and BANK MANDIRI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FEMALE 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.| FEMALE HEALTH vs. Apple Inc | FEMALE HEALTH vs. Apple Inc | FEMALE HEALTH vs. Apple Inc | FEMALE HEALTH vs. Apple Inc |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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