Correlation Between BANK MANDIRI and SPROUTS FARMERS
Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI and SPROUTS FARMERS 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 SPROUTS FARMERS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK MANDIRI and SPROUTS FARMERS MKT, you can compare the effects of market volatilities on BANK MANDIRI and SPROUTS FARMERS 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 SPROUTS FARMERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and SPROUTS FARMERS.
Diversification Opportunities for BANK MANDIRI and SPROUTS FARMERS
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BANK and SPROUTS is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and SPROUTS FARMERS MKT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPROUTS FARMERS MKT 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 are associated (or correlated) with SPROUTS FARMERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPROUTS FARMERS MKT has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and SPROUTS FARMERS go up and down completely randomly.
Pair Corralation between BANK MANDIRI and SPROUTS FARMERS
Assuming the 90 days trading horizon BANK MANDIRI is expected to under-perform the SPROUTS FARMERS. But the stock apears to be less risky and, when comparing its historical volatility, BANK MANDIRI is 1.92 times less risky than SPROUTS FARMERS. The stock trades about -0.35 of its potential returns per unit of risk. The SPROUTS FARMERS MKT is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 13,650 in SPROUTS FARMERS MKT on October 16, 2024 and sell it today you would lose (50.00) from holding SPROUTS FARMERS MKT or give up 0.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK MANDIRI vs. SPROUTS FARMERS MKT
Performance |
| Timeline |
| BANK MANDIRI |
| SPROUTS FARMERS MKT |
BANK MANDIRI and SPROUTS FARMERS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK MANDIRI and SPROUTS FARMERS
The main advantage of trading using opposite BANK MANDIRI and SPROUTS FARMERS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK MANDIRI position performs unexpectedly, SPROUTS FARMERS 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 SPROUTS FARMERS will offset losses from the drop in SPROUTS FARMERS's long position.| BANK MANDIRI vs. Zijin Mining Group | BANK MANDIRI vs. MAGNUM MINING EXP | BANK MANDIRI vs. DETALION GAMES SA | BANK MANDIRI vs. FRACTAL GAMING GROUP |
| SPROUTS FARMERS vs. Apple Inc | SPROUTS FARMERS vs. Apple Inc | SPROUTS FARMERS vs. Apple Inc | SPROUTS FARMERS 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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