Correlation Between BANK MANDIRI and NOV
Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI and NOV 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 NOV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK MANDIRI and NOV Inc, you can compare the effects of market volatilities on BANK MANDIRI and NOV 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 NOV. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and NOV.
Diversification Opportunities for BANK MANDIRI and NOV
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BANK and NOV is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and NOV Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOV Inc 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 NOV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOV Inc has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and NOV go up and down completely randomly.
Pair Corralation between BANK MANDIRI and NOV
Assuming the 90 days trading horizon BANK MANDIRI is expected to under-perform the NOV. But the stock apears to be less risky and, when comparing its historical volatility, BANK MANDIRI is 1.08 times less risky than NOV. The stock trades about -0.01 of its potential returns per unit of risk. The NOV Inc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,530 in NOV Inc on August 25, 2024 and sell it today you would earn a total of 15.00 from holding NOV Inc or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.48% |
| Values | Daily Returns |
BANK MANDIRI vs. NOV Inc
Performance |
| Timeline |
| BANK MANDIRI |
| NOV Inc |
BANK MANDIRI and NOV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK MANDIRI and NOV
The main advantage of trading using opposite BANK MANDIRI and NOV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK MANDIRI position performs unexpectedly, NOV 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 NOV will offset losses from the drop in NOV's long position.| BANK MANDIRI vs. Apple Inc | BANK MANDIRI vs. Apple Inc | BANK MANDIRI vs. Apple Inc | BANK MANDIRI vs. Apple Inc |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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