Correlation Between BANK MANDIRI and CARDINAL HEALTH
Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI and CARDINAL HEALTH 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 CARDINAL HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK MANDIRI and CARDINAL HEALTH, you can compare the effects of market volatilities on BANK MANDIRI and CARDINAL HEALTH 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 CARDINAL HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and CARDINAL HEALTH.
Diversification Opportunities for BANK MANDIRI and CARDINAL HEALTH
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BANK and CARDINAL is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and CARDINAL HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARDINAL HEALTH 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 CARDINAL HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CARDINAL HEALTH has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and CARDINAL HEALTH go up and down completely randomly.
Pair Corralation between BANK MANDIRI and CARDINAL HEALTH
Assuming the 90 days trading horizon BANK MANDIRI is expected to under-perform the CARDINAL HEALTH. In addition to that, BANK MANDIRI is 1.46 times more volatile than CARDINAL HEALTH. It trades about -0.32 of its total potential returns per unit of risk. CARDINAL HEALTH is currently generating about 0.05 per unit of volatility. If you would invest 11,608 in CARDINAL HEALTH on October 10, 2024 and sell it today you would earn a total of 102.00 from holding CARDINAL HEALTH or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK MANDIRI vs. CARDINAL HEALTH
Performance |
| Timeline |
| BANK MANDIRI |
| CARDINAL HEALTH |
BANK MANDIRI and CARDINAL HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK MANDIRI and CARDINAL HEALTH
The main advantage of trading using opposite BANK MANDIRI and CARDINAL HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK MANDIRI position performs unexpectedly, CARDINAL HEALTH 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 CARDINAL HEALTH will offset losses from the drop in CARDINAL HEALTH's long position.| BANK MANDIRI vs. EEDUCATION ALBERT AB | BANK MANDIRI vs. CHINA EDUCATION GROUP | BANK MANDIRI vs. Sunny Optical Technology | BANK MANDIRI vs. Kingdee International Software |
| CARDINAL HEALTH vs. PENN NATL GAMING | CARDINAL HEALTH vs. Linedata Services SA | CARDINAL HEALTH vs. OURGAME INTHOLDL 00005 | CARDINAL HEALTH vs. NTT DATA |
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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