Correlation Between Alphabet and Mandala Multifinance
Can any of the company-specific risk be diversified away by investing in both Alphabet and Mandala Multifinance 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 Alphabet and Mandala Multifinance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphabet Inc Class C and Mandala Multifinance Tbk, you can compare the effects of market volatilities on Alphabet and Mandala Multifinance 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 Alphabet with a short position of Mandala Multifinance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and Mandala Multifinance.
Diversification Opportunities for Alphabet and Mandala Multifinance
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alphabet and Mandala is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C and Mandala Multifinance Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mandala Multifinance Tbk and Alphabet 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 Alphabet Inc Class C are associated (or correlated) with Mandala Multifinance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mandala Multifinance Tbk has no effect on the direction of Alphabet i.e., Alphabet and Mandala Multifinance go up and down completely randomly.
Pair Corralation between Alphabet and Mandala Multifinance
Given the investment horizon of 90 days Alphabet Inc Class C is expected to generate 1.41 times more return on investment than Mandala Multifinance. However, Alphabet is 1.41 times more volatile than Mandala Multifinance Tbk. It trades about 0.02 of its potential returns per unit of risk. Mandala Multifinance Tbk is currently generating about -0.07 per unit of risk. If you would invest 16,834 in Alphabet Inc Class C on August 28, 2024 and sell it today you would earn a total of 109.00 from holding Alphabet Inc Class C or generate 0.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alphabet Inc Class C vs. Mandala Multifinance Tbk
Performance |
| Timeline |
| Alphabet Class C |
| Mandala Multifinance Tbk |
Alphabet and Mandala Multifinance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphabet and Mandala Multifinance
The main advantage of trading using opposite Alphabet and Mandala Multifinance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphabet position performs unexpectedly, Mandala Multifinance 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 Mandala Multifinance will offset losses from the drop in Mandala Multifinance's long position.The idea behind Alphabet Inc Class C and Mandala Multifinance Tbk 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.| Mandala Multifinance vs. Paninvest Tbk | Mandala Multifinance vs. Maskapai Reasuransi Indonesia | Mandala Multifinance vs. Panin Sekuritas Tbk | Mandala Multifinance vs. Wahana Ottomitra Multiartha |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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