Correlation Between BANK MANDIRI and Baker Hughes
Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI and Baker Hughes 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 Baker Hughes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK MANDIRI and Baker Hughes Co, you can compare the effects of market volatilities on BANK MANDIRI and Baker Hughes 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 Baker Hughes. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and Baker Hughes.
Diversification Opportunities for BANK MANDIRI and Baker Hughes
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BANK and Baker is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and Baker Hughes Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baker Hughes 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 Baker Hughes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baker Hughes has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and Baker Hughes go up and down completely randomly.
Pair Corralation between BANK MANDIRI and Baker Hughes
Assuming the 90 days trading horizon BANK MANDIRI is expected to under-perform the Baker Hughes. In addition to that, BANK MANDIRI is 1.18 times more volatile than Baker Hughes Co. It trades about -0.06 of its total potential returns per unit of risk. Baker Hughes Co is currently generating about 0.32 per unit of volatility. If you would invest 3,441 in Baker Hughes Co on August 29, 2024 and sell it today you would earn a total of 681.00 from holding Baker Hughes Co or generate 19.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK MANDIRI vs. Baker Hughes Co
Performance |
| Timeline |
| BANK MANDIRI |
| Baker Hughes |
BANK MANDIRI and Baker Hughes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK MANDIRI and Baker Hughes
The main advantage of trading using opposite BANK MANDIRI and Baker Hughes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK MANDIRI position performs unexpectedly, Baker Hughes 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 Baker Hughes will offset losses from the drop in Baker Hughes' long position.| BANK MANDIRI vs. RETAIL FOOD GROUP | BANK MANDIRI vs. CANON MARKETING JP | BANK MANDIRI vs. Perma Fix Environmental Services | BANK MANDIRI vs. Globe Trade Centre |
| Baker Hughes vs. APPLIED MATERIALS | Baker Hughes vs. Plastic Omnium | Baker Hughes vs. Eagle Materials | Baker Hughes vs. NEWELL RUBBERMAID |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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