Correlation Between BANK MANDIRI and Nomura Holdings
Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI and Nomura Holdings 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 Nomura Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK MANDIRI and Nomura Holdings, you can compare the effects of market volatilities on BANK MANDIRI and Nomura Holdings 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 Nomura Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and Nomura Holdings.
Diversification Opportunities for BANK MANDIRI and Nomura Holdings
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BANK and Nomura is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and Nomura Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nomura Holdings 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 Nomura Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nomura Holdings has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and Nomura Holdings go up and down completely randomly.
Pair Corralation between BANK MANDIRI and Nomura Holdings
Assuming the 90 days trading horizon BANK MANDIRI is expected to generate 2.09 times less return on investment than Nomura Holdings. In addition to that, BANK MANDIRI is 1.43 times more volatile than Nomura Holdings. It trades about 0.03 of its total potential returns per unit of risk. Nomura Holdings is currently generating about 0.09 per unit of volatility. If you would invest 354.00 in Nomura Holdings on August 25, 2024 and sell it today you would earn a total of 211.00 from holding Nomura Holdings or generate 59.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK MANDIRI vs. Nomura Holdings
Performance |
| Timeline |
| BANK MANDIRI |
| Nomura Holdings |
BANK MANDIRI and Nomura Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK MANDIRI and Nomura Holdings
The main advantage of trading using opposite BANK MANDIRI and Nomura Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK MANDIRI position performs unexpectedly, Nomura Holdings 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 Nomura Holdings will offset losses from the drop in Nomura Holdings' long position.| BANK MANDIRI vs. Chunghwa Telecom Co | BANK MANDIRI vs. PARKEN Sport Entertainment | BANK MANDIRI vs. Iridium Communications | BANK MANDIRI vs. COMBA TELECOM SYST |
| Nomura Holdings vs. Constellation Software | Nomura Holdings vs. UNIVMUSIC GRPADR050 | Nomura Holdings vs. BE Semiconductor Industries | Nomura Holdings vs. NXP Semiconductors NV |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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