Correlation Between Seven West and BANK MANDIRI
Can any of the company-specific risk be diversified away by investing in both Seven West and BANK MANDIRI 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 Seven West and BANK MANDIRI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seven West Media and BANK MANDIRI, you can compare the effects of market volatilities on Seven West and BANK MANDIRI 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 Seven West with a short position of BANK MANDIRI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seven West and BANK MANDIRI.
Diversification Opportunities for Seven West and BANK MANDIRI
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Seven and BANK is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Seven West Media and BANK MANDIRI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK MANDIRI and Seven West 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 Seven West Media are associated (or correlated) with BANK MANDIRI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK MANDIRI has no effect on the direction of Seven West i.e., Seven West and BANK MANDIRI go up and down completely randomly.
Pair Corralation between Seven West and BANK MANDIRI
Assuming the 90 days horizon Seven West Media is expected to under-perform the BANK MANDIRI. In addition to that, Seven West is 1.83 times more volatile than BANK MANDIRI. It trades about -0.03 of its total potential returns per unit of risk. BANK MANDIRI is currently generating about 0.03 per unit of volatility. If you would invest 29.00 in BANK MANDIRI on September 12, 2024 and sell it today you would earn a total of 6.00 from holding BANK MANDIRI or generate 20.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seven West Media vs. BANK MANDIRI
Performance |
| Timeline |
| Seven West Media |
| BANK MANDIRI |
Seven West and BANK MANDIRI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seven West and BANK MANDIRI
The main advantage of trading using opposite Seven West and BANK MANDIRI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seven West position performs unexpectedly, BANK MANDIRI 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 BANK MANDIRI will offset losses from the drop in BANK MANDIRI's long position.| Seven West vs. Live Nation Entertainment | Seven West vs. Toho Co | Seven West vs. Superior Plus Corp | Seven West vs. NMI Holdings |
| BANK MANDIRI vs. NURAN WIRELESS INC | BANK MANDIRI vs. Summit Hotel Properties | BANK MANDIRI vs. KENEDIX OFFICE INV | BANK MANDIRI vs. Pebblebrook Hotel Trust |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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