Correlation Between BANK MANDIRI and Walmart
Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI and Walmart 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 Walmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK MANDIRI and Walmart, you can compare the effects of market volatilities on BANK MANDIRI and Walmart 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 Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and Walmart.
Diversification Opportunities for BANK MANDIRI and Walmart
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BANK and Walmart is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart 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 Walmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walmart has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and Walmart go up and down completely randomly.
Pair Corralation between BANK MANDIRI and Walmart
Assuming the 90 days trading horizon BANK MANDIRI is expected to generate 3.4 times less return on investment than Walmart. In addition to that, BANK MANDIRI is 1.9 times more volatile than Walmart. It trades about 0.02 of its total potential returns per unit of risk. Walmart is currently generating about 0.11 per unit of volatility. If you would invest 4,676 in Walmart on August 27, 2024 and sell it today you would earn a total of 3,925 from holding Walmart or generate 83.94% 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. Walmart
Performance |
| Timeline |
| BANK MANDIRI |
| Walmart |
BANK MANDIRI and Walmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK MANDIRI and Walmart
The main advantage of trading using opposite BANK MANDIRI and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK MANDIRI position performs unexpectedly, Walmart 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 Walmart will offset losses from the drop in Walmart's long position.| BANK MANDIRI vs. Apple Inc | BANK MANDIRI vs. Apple Inc | BANK MANDIRI vs. Apple Inc | BANK MANDIRI vs. Microsoft |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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