Correlation Between BANK MANDIRI and Hong Kong
Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI and Hong Kong 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 Hong Kong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK MANDIRI and Hong Kong Exchanges, you can compare the effects of market volatilities on BANK MANDIRI and Hong Kong 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 Hong Kong. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and Hong Kong.
Diversification Opportunities for BANK MANDIRI and Hong Kong
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BANK and Hong is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and Hong Kong Exchanges in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hong Kong Exchanges 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 Hong Kong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hong Kong Exchanges has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and Hong Kong go up and down completely randomly.
Pair Corralation between BANK MANDIRI and Hong Kong
Assuming the 90 days trading horizon BANK MANDIRI is expected to generate 0.97 times more return on investment than Hong Kong. However, BANK MANDIRI is 1.03 times less risky than Hong Kong. It trades about 0.06 of its potential returns per unit of risk. Hong Kong Exchanges is currently generating about 0.02 per unit of risk. If you would invest 33.00 in BANK MANDIRI on September 13, 2024 and sell it today you would earn a total of 1.00 from holding BANK MANDIRI or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK MANDIRI vs. Hong Kong Exchanges
Performance |
| Timeline |
| BANK MANDIRI |
| Hong Kong Exchanges |
BANK MANDIRI and Hong Kong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK MANDIRI and Hong Kong
The main advantage of trading using opposite BANK MANDIRI and Hong Kong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK MANDIRI position performs unexpectedly, Hong Kong 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 Hong Kong will offset losses from the drop in Hong Kong's long position.| BANK MANDIRI vs. NXP Semiconductors NV | BANK MANDIRI vs. ON SEMICONDUCTOR | BANK MANDIRI vs. Arrow Electronics | BANK MANDIRI vs. STORE ELECTRONIC |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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