Correlation Between Fuji Media and BANK MANDIRI
Can any of the company-specific risk be diversified away by investing in both Fuji Media 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 Fuji Media and BANK MANDIRI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fuji Media Holdings and BANK MANDIRI, you can compare the effects of market volatilities on Fuji Media 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 Fuji Media with a short position of BANK MANDIRI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuji Media and BANK MANDIRI.
Diversification Opportunities for Fuji Media and BANK MANDIRI
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fuji and BANK is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Fuji Media Holdings and BANK MANDIRI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK MANDIRI and Fuji Media 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 Fuji Media Holdings 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 Fuji Media i.e., Fuji Media and BANK MANDIRI go up and down completely randomly.
Pair Corralation between Fuji Media and BANK MANDIRI
Assuming the 90 days trading horizon Fuji Media Holdings is expected to generate 0.94 times more return on investment than BANK MANDIRI. However, Fuji Media Holdings is 1.06 times less risky than BANK MANDIRI. It trades about 0.33 of its potential returns per unit of risk. BANK MANDIRI is currently generating about 0.09 per unit of risk. If you would invest 1,030 in Fuji Media Holdings on November 7, 2024 and sell it today you would earn a total of 310.00 from holding Fuji Media Holdings or generate 30.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fuji Media Holdings vs. BANK MANDIRI
Performance |
| Timeline |
| Fuji Media Holdings |
| BANK MANDIRI |
Fuji Media and BANK MANDIRI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuji Media and BANK MANDIRI
The main advantage of trading using opposite Fuji Media and BANK MANDIRI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuji Media 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.| Fuji Media vs. VELA TECHNOLPLC LS 0001 | Fuji Media vs. NXP Semiconductors NV | Fuji Media vs. Playtech plc | Fuji Media vs. Genscript Biotech |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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