Correlation Between BANK MANDIRI and Vicinity Centres
Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI and Vicinity Centres 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 Vicinity Centres into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK MANDIRI and Vicinity Centres, you can compare the effects of market volatilities on BANK MANDIRI and Vicinity Centres 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 Vicinity Centres. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and Vicinity Centres.
Diversification Opportunities for BANK MANDIRI and Vicinity Centres
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BANK and Vicinity is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and Vicinity Centres in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vicinity Centres 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 Vicinity Centres. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vicinity Centres has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and Vicinity Centres go up and down completely randomly.
Pair Corralation between BANK MANDIRI and Vicinity Centres
Assuming the 90 days trading horizon BANK MANDIRI is expected to under-perform the Vicinity Centres. In addition to that, BANK MANDIRI is 2.65 times more volatile than Vicinity Centres. It trades about -0.02 of its total potential returns per unit of risk. Vicinity Centres is currently generating about 0.13 per unit of volatility. If you would invest 125.00 in Vicinity Centres on August 28, 2024 and sell it today you would earn a total of 4.00 from holding Vicinity Centres or generate 3.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK MANDIRI vs. Vicinity Centres
Performance |
| Timeline |
| BANK MANDIRI |
| Vicinity Centres |
BANK MANDIRI and Vicinity Centres Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK MANDIRI and Vicinity Centres
The main advantage of trading using opposite BANK MANDIRI and Vicinity Centres positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK MANDIRI position performs unexpectedly, Vicinity Centres 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 Vicinity Centres will offset losses from the drop in Vicinity Centres' long position.| BANK MANDIRI vs. Apple Inc | BANK MANDIRI vs. Apple Inc | BANK MANDIRI vs. Apple Inc | BANK MANDIRI vs. Microsoft |
| Vicinity Centres vs. PennantPark Investment | Vicinity Centres vs. Casio Computer CoLtd | Vicinity Centres vs. REINET INVESTMENTS SCA | Vicinity Centres vs. Postal Savings Bank |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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