Correlation Between Japan Asia and BANK MANDIRI
Can any of the company-specific risk be diversified away by investing in both Japan Asia 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 Japan Asia and BANK MANDIRI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Asia Investment and BANK MANDIRI, you can compare the effects of market volatilities on Japan Asia 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 Japan Asia with a short position of BANK MANDIRI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Asia and BANK MANDIRI.
Diversification Opportunities for Japan Asia and BANK MANDIRI
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Japan and BANK is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Japan Asia Investment and BANK MANDIRI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK MANDIRI and Japan Asia 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 Japan Asia Investment 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 Japan Asia i.e., Japan Asia and BANK MANDIRI go up and down completely randomly.
Pair Corralation between Japan Asia and BANK MANDIRI
Assuming the 90 days horizon Japan Asia is expected to generate 1.55 times less return on investment than BANK MANDIRI. In addition to that, Japan Asia is 1.48 times more volatile than BANK MANDIRI. It trades about 0.01 of its total potential returns per unit of risk. BANK MANDIRI is currently generating about 0.02 per unit of volatility. If you would invest 33.00 in BANK MANDIRI on September 12, 2024 and sell it today you would earn a total of 2.00 from holding BANK MANDIRI or generate 6.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Asia Investment vs. BANK MANDIRI
Performance |
| Timeline |
| Japan Asia Investment |
| BANK MANDIRI |
Japan Asia and BANK MANDIRI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Asia and BANK MANDIRI
The main advantage of trading using opposite Japan Asia and BANK MANDIRI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Asia 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.| Japan Asia vs. Ameriprise Financial | Japan Asia vs. Ares Management Corp | Japan Asia vs. Superior Plus Corp | Japan Asia vs. SIVERS SEMICONDUCTORS AB |
| BANK MANDIRI vs. Apple Inc | BANK MANDIRI vs. Apple Inc | BANK MANDIRI vs. Apple Inc | BANK MANDIRI vs. Apple Inc |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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