Correlation Between H2O Retailing and BANK MANDIRI
Can any of the company-specific risk be diversified away by investing in both H2O Retailing 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 H2O Retailing and BANK MANDIRI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between H2O Retailing and BANK MANDIRI, you can compare the effects of market volatilities on H2O Retailing 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 H2O Retailing with a short position of BANK MANDIRI. Check out your portfolio center. Please also check ongoing floating volatility patterns of H2O Retailing and BANK MANDIRI.
Diversification Opportunities for H2O Retailing and BANK MANDIRI
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between H2O and BANK is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding H2O Retailing and BANK MANDIRI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK MANDIRI and H2O Retailing 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 H2O Retailing 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 H2O Retailing i.e., H2O Retailing and BANK MANDIRI go up and down completely randomly.
Pair Corralation between H2O Retailing and BANK MANDIRI
Assuming the 90 days horizon H2O Retailing is expected to under-perform the BANK MANDIRI. But the stock apears to be less risky and, when comparing its historical volatility, H2O Retailing is 6.26 times less risky than BANK MANDIRI. The stock trades about -0.2 of its potential returns per unit of risk. The BANK MANDIRI is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 30.00 in BANK MANDIRI on October 26, 2024 and sell it today you would earn a total of 3.00 from holding BANK MANDIRI or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
H2O Retailing vs. BANK MANDIRI
Performance |
| Timeline |
| H2O Retailing |
| BANK MANDIRI |
H2O Retailing and BANK MANDIRI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with H2O Retailing and BANK MANDIRI
The main advantage of trading using opposite H2O Retailing and BANK MANDIRI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if H2O Retailing 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.| H2O Retailing vs. DATADOT TECHNOLOGY | H2O Retailing vs. Canadian Utilities Limited | H2O Retailing vs. Japan Tobacco | H2O Retailing vs. Pure Storage |
| BANK MANDIRI vs. PLAYTECH | BANK MANDIRI vs. Nok Airlines PCL | BANK MANDIRI vs. ANTA SPORTS PRODUCT | BANK MANDIRI vs. USWE SPORTS AB |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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