Correlation Between PT Bank and HNI
Can any of the company-specific risk be diversified away by investing in both PT Bank and HNI 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 PT Bank and HNI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Bank Mandiri and HNI Corporation, you can compare the effects of market volatilities on PT Bank and HNI 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 PT Bank with a short position of HNI. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and HNI.
Diversification Opportunities for PT Bank and HNI
Excellent diversification
The 3 months correlation between PQ9 and HNI is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Mandiri and HNI Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HNI Corporation and PT Bank 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 PT Bank Mandiri are associated (or correlated) with HNI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HNI Corporation has no effect on the direction of PT Bank i.e., PT Bank and HNI go up and down completely randomly.
Pair Corralation between PT Bank and HNI
Assuming the 90 days horizon PT Bank Mandiri is expected to generate 2.47 times more return on investment than HNI. However, PT Bank is 2.47 times more volatile than HNI Corporation. It trades about 0.06 of its potential returns per unit of risk. HNI Corporation is currently generating about 0.1 per unit of risk. If you would invest 32.00 in PT Bank Mandiri on August 30, 2024 and sell it today you would earn a total of 8.00 from holding PT Bank Mandiri or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Mandiri vs. HNI Corp.
Performance |
| Timeline |
| PT Bank Mandiri |
| HNI Corporation |
PT Bank and HNI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and HNI
The main advantage of trading using opposite PT Bank and HNI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, HNI 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 HNI will offset losses from the drop in HNI's long position.| PT Bank vs. International Consolidated Airlines | PT Bank vs. NAKED WINES PLC | PT Bank vs. Charter Communications | PT Bank vs. Spirent Communications plc |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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