Correlation Between BANK MANDIRI and Westwater Resources
Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI and Westwater Resources 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 Westwater Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK MANDIRI and Westwater Resources, you can compare the effects of market volatilities on BANK MANDIRI and Westwater Resources 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 Westwater Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and Westwater Resources.
Diversification Opportunities for BANK MANDIRI and Westwater Resources
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BANK and Westwater is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and Westwater Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westwater Resources 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 Westwater Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westwater Resources has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and Westwater Resources go up and down completely randomly.
Pair Corralation between BANK MANDIRI and Westwater Resources
Assuming the 90 days trading horizon BANK MANDIRI is expected to under-perform the Westwater Resources. But the stock apears to be less risky and, when comparing its historical volatility, BANK MANDIRI is 1.49 times less risky than Westwater Resources. The stock trades about -0.27 of its potential returns per unit of risk. The Westwater Resources is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 49.00 in Westwater Resources on September 25, 2024 and sell it today you would lose (4.00) from holding Westwater Resources or give up 8.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
BANK MANDIRI vs. Westwater Resources
Performance |
| Timeline |
| BANK MANDIRI |
| Westwater Resources |
BANK MANDIRI and Westwater Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK MANDIRI and Westwater Resources
The main advantage of trading using opposite BANK MANDIRI and Westwater Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK MANDIRI position performs unexpectedly, Westwater Resources 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 Westwater Resources will offset losses from the drop in Westwater Resources' long position.| BANK MANDIRI vs. Apple Inc | BANK MANDIRI vs. Apple Inc | BANK MANDIRI vs. Apple Inc | BANK MANDIRI vs. Microsoft |
| Westwater Resources vs. Columbia Sportswear | Westwater Resources vs. InPlay Oil Corp | Westwater Resources vs. Playtech plc | Westwater Resources vs. Pentair plc |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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