Correlation Between Brockhaus Capital and BANK MANDIRI

Can any of the company-specific risk be diversified away by investing in both Brockhaus Capital 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 Brockhaus Capital and BANK MANDIRI into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Brockhaus Capital Management and BANK MANDIRI, you can compare the effects of market volatilities on Brockhaus Capital 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 Brockhaus Capital with a short position of BANK MANDIRI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brockhaus Capital and BANK MANDIRI.

Diversification Opportunities for Brockhaus Capital and BANK MANDIRI

0.64

Correlation Coefficient

Brockhaus Capital  BANK MANDIRI

Poor diversification

The 3 months correlation between Brockhaus and BANK is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Brockhaus Capital Management and BANK MANDIRI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK MANDIRI and Brockhaus Capital 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 Brockhaus Capital Management 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 Brockhaus Capital i.e., Brockhaus Capital and BANK MANDIRI go up and down completely randomly.

Pair Corralation between Brockhaus Capital and BANK MANDIRI

Assuming the 90 days trading horizon Brockhaus Capital Management is expected to generate 1.35 times more return on investment than BANK MANDIRI. However, Brockhaus Capital is 1.35 times more volatile than BANK MANDIRI. It trades about 0.02 of its potential returns per unit of risk. BANK MANDIRI is currently generating about 0.03 per unit of risk. If you would invest  2,066  in Brockhaus Capital Management on October 4, 2024 and sell it today you would earn a total of  274.00  from holding Brockhaus Capital Management or generate 13.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Brockhaus Capital Management  vs.  BANK MANDIRI

Brockhaus Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brockhaus Capital Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's technical indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

BANK MANDIRI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BANK MANDIRI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Brockhaus Capital and BANK MANDIRI

The main advantage of trading using opposite Brockhaus Capital and BANK MANDIRI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brockhaus Capital 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.

The idea behind Brockhaus Capital Management and BANK MANDIRI pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.