Correlation Between Bank Mandiri and Headwater Gold
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Headwater Gold 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 Bank Mandiri and Headwater Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Mandiri Persero and Headwater Gold, you can compare the effects of market volatilities on Bank Mandiri and Headwater Gold 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 Bank Mandiri with a short position of Headwater Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Headwater Gold.
Diversification Opportunities for Bank Mandiri and Headwater Gold
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Headwater is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Headwater Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Headwater Gold and Bank Mandiri 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 Bank Mandiri Persero are associated (or correlated) with Headwater Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Headwater Gold has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Headwater Gold go up and down completely randomly.
Pair Corralation between Bank Mandiri and Headwater Gold
Assuming the 90 days horizon Bank Mandiri Persero is expected to generate 0.73 times more return on investment than Headwater Gold. However, Bank Mandiri Persero is 1.37 times less risky than Headwater Gold. It trades about -0.09 of its potential returns per unit of risk. Headwater Gold is currently generating about -0.13 per unit of risk. If you would invest 45.00 in Bank Mandiri Persero on August 28, 2024 and sell it today you would lose (4.00) from holding Bank Mandiri Persero or give up 8.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Headwater Gold
Performance |
| Timeline |
| Bank Mandiri Persero |
| Headwater Gold |
Bank Mandiri and Headwater Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Headwater Gold
The main advantage of trading using opposite Bank Mandiri and Headwater Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Headwater Gold 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 Headwater Gold will offset losses from the drop in Headwater Gold's long position.The idea behind Bank Mandiri Persero and Headwater Gold 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.| Headwater Gold vs. Aurion Resources | Headwater Gold vs. Liberty Gold Corp | Headwater Gold vs. Orezone Gold Corp | Headwater Gold vs. Fortuna Silver Mines |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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