Correlation Between BANK MANDIRI and Seven I
Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI and Seven I 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 Seven I into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK MANDIRI and Seven i Holdings, you can compare the effects of market volatilities on BANK MANDIRI and Seven I 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 Seven I. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and Seven I.
Diversification Opportunities for BANK MANDIRI and Seven I
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BANK and Seven is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and Seven i Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seven i 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 Seven I. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seven i Holdings has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and Seven I go up and down completely randomly.
Pair Corralation between BANK MANDIRI and Seven I
Assuming the 90 days trading horizon BANK MANDIRI is expected to under-perform the Seven I. But the stock apears to be less risky and, when comparing its historical volatility, BANK MANDIRI is 1.09 times less risky than Seven I. The stock trades about -0.08 of its potential returns per unit of risk. The Seven i Holdings is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,367 in Seven i Holdings on August 29, 2024 and sell it today you would earn a total of 194.00 from holding Seven i Holdings or generate 14.19% 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. Seven i Holdings
Performance |
| Timeline |
| BANK MANDIRI |
| Seven i Holdings |
BANK MANDIRI and Seven I Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK MANDIRI and Seven I
The main advantage of trading using opposite BANK MANDIRI and Seven I positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK MANDIRI position performs unexpectedly, Seven I 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 Seven I will offset losses from the drop in Seven I's long position.| BANK MANDIRI vs. AGF Management Limited | BANK MANDIRI vs. FEMALE HEALTH | BANK MANDIRI vs. DiamondRock Hospitality | BANK MANDIRI vs. Waste Management |
| Seven I vs. TESCO PLC LS 0633333 | Seven I vs. Superior Plus Corp | Seven I vs. NMI Holdings | Seven I vs. SIVERS SEMICONDUCTORS AB |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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