Correlation Between BANK MANDIRI and Securitas
Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI and Securitas 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 Securitas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK MANDIRI and Securitas AB, you can compare the effects of market volatilities on BANK MANDIRI and Securitas 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 Securitas. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and Securitas.
Diversification Opportunities for BANK MANDIRI and Securitas
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BANK and Securitas is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and Securitas AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Securitas AB 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 Securitas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Securitas AB has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and Securitas go up and down completely randomly.
Pair Corralation between BANK MANDIRI and Securitas
Assuming the 90 days trading horizon BANK MANDIRI is expected to generate 0.6 times more return on investment than Securitas. However, BANK MANDIRI is 1.66 times less risky than Securitas. It trades about 0.23 of its potential returns per unit of risk. Securitas AB is currently generating about -0.03 per unit of risk. If you would invest 34.00 in BANK MANDIRI on October 29, 2024 and sell it today you would earn a total of 1.00 from holding BANK MANDIRI or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK MANDIRI vs. Securitas AB
Performance |
| Timeline |
| BANK MANDIRI |
| Securitas AB |
BANK MANDIRI and Securitas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK MANDIRI and Securitas
The main advantage of trading using opposite BANK MANDIRI and Securitas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK MANDIRI position performs unexpectedly, Securitas 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 Securitas will offset losses from the drop in Securitas' long position.| BANK MANDIRI vs. NTT DATA | BANK MANDIRI vs. INFORMATION SVC GRP | BANK MANDIRI vs. SILVER BULLET DATA | BANK MANDIRI vs. TERADATA |
| Securitas vs. Strategic Education | Securitas vs. Easy Software AG | Securitas vs. SCOTT TECHNOLOGY | Securitas vs. AECOM TECHNOLOGY |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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