Correlation Between Home Depot and Bank Mandiri
Can any of the company-specific risk be diversified away by investing in both Home Depot 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 Home Depot and Bank Mandiri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Depot and Bank Mandiri Persero, you can compare the effects of market volatilities on Home Depot 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 Home Depot with a short position of Bank Mandiri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and Bank Mandiri.
Diversification Opportunities for Home Depot and Bank Mandiri
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Home and Bank is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and Bank Mandiri Persero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Mandiri Persero and Home Depot 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 Home Depot 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 Persero has no effect on the direction of Home Depot i.e., Home Depot and Bank Mandiri go up and down completely randomly.
Pair Corralation between Home Depot and Bank Mandiri
Allowing for the 90-day total investment horizon Home Depot is expected to generate 0.69 times more return on investment than Bank Mandiri. However, Home Depot is 1.44 times less risky than Bank Mandiri. It trades about 0.15 of its potential returns per unit of risk. Bank Mandiri Persero is currently generating about 0.04 per unit of risk. If you would invest 32,446 in Home Depot on August 24, 2024 and sell it today you would earn a total of 8,599 from holding Home Depot or generate 26.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Home Depot vs. Bank Mandiri Persero
Performance |
| Timeline |
| Home Depot |
| Bank Mandiri Persero |
Home Depot and Bank Mandiri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and Bank Mandiri
The main advantage of trading using opposite Home Depot and Bank Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot 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.| Home Depot vs. Small Cap Core | Home Depot vs. Freedom Holding Corp | Home Depot vs. Gfl Environmental Holdings | Home Depot vs. Growth Fund Of |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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