Correlation Between Bank Mandiri and Halma Plc
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Halma Plc 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 Halma Plc 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 Halma plc, you can compare the effects of market volatilities on Bank Mandiri and Halma Plc 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 Halma Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Halma Plc.
Diversification Opportunities for Bank Mandiri and Halma Plc
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Halma is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Halma plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halma plc 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 Halma Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Halma plc has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Halma Plc go up and down completely randomly.
Pair Corralation between Bank Mandiri and Halma Plc
Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the Halma Plc. In addition to that, Bank Mandiri is 1.05 times more volatile than Halma plc. It trades about -0.07 of its total potential returns per unit of risk. Halma plc is currently generating about 0.01 per unit of volatility. If you would invest 3,408 in Halma plc on August 29, 2024 and sell it today you would earn a total of 7.00 from holding Halma plc or generate 0.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Halma plc
Performance |
| Timeline |
| Bank Mandiri Persero |
| Halma plc |
Bank Mandiri and Halma Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Halma Plc
The main advantage of trading using opposite Bank Mandiri and Halma Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Halma Plc 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 Halma Plc will offset losses from the drop in Halma Plc's long position.| Bank Mandiri vs. Israel Discount Bank | Bank Mandiri vs. Baraboo Bancorporation | Bank Mandiri vs. Danske Bank AS | Bank Mandiri vs. Jyske Bank AS |
| Halma Plc vs. Honeywell International | Halma Plc vs. 3M Company | Halma Plc vs. Mitsubishi Corp | Halma Plc vs. Hitachi |
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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