Correlation Between BANK MANDIRI and Microsoft
Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI and Microsoft 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 Microsoft into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK MANDIRI and Microsoft, you can compare the effects of market volatilities on BANK MANDIRI and Microsoft 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 Microsoft. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and Microsoft.
Diversification Opportunities for BANK MANDIRI and Microsoft
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BANK and Microsoft is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and Microsoft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microsoft 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 Microsoft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microsoft has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and Microsoft go up and down completely randomly.
Pair Corralation between BANK MANDIRI and Microsoft
Assuming the 90 days trading horizon BANK MANDIRI is expected to under-perform the Microsoft. In addition to that, BANK MANDIRI is 1.3 times more volatile than Microsoft. It trades about -0.17 of its total potential returns per unit of risk. Microsoft is currently generating about 0.0 per unit of volatility. If you would invest 39,581 in Microsoft on August 27, 2024 and sell it today you would lose (56.00) from holding Microsoft or give up 0.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK MANDIRI vs. Microsoft
Performance |
| Timeline |
| BANK MANDIRI |
| Microsoft |
BANK MANDIRI and Microsoft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK MANDIRI and Microsoft
The main advantage of trading using opposite BANK MANDIRI and Microsoft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK MANDIRI position performs unexpectedly, Microsoft 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 Microsoft will offset losses from the drop in Microsoft's long position.| BANK MANDIRI vs. Richardson Electronics | BANK MANDIRI vs. ANTA SPORTS PRODUCT | BANK MANDIRI vs. Nucletron Electronic Aktiengesellschaft | BANK MANDIRI vs. Samsung Electronics Co |
| Microsoft vs. ALBIS LEASING AG | Microsoft vs. Sabra Health Care | Microsoft vs. National Health Investors | Microsoft vs. QBE Insurance Group |
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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