Correlation Between Fukuyama Transporting and BANK MANDIRI

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

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

Diversification Opportunities for Fukuyama Transporting and BANK MANDIRI

0.07

Correlation Coefficient

Fukuyama Transporting  BANK MANDIRI

Significant diversification

The 3 months correlation between Fukuyama and BANK is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Fukuyama Transporting Co and BANK MANDIRI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK MANDIRI and Fukuyama Transporting 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 Fukuyama Transporting Co 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 Fukuyama Transporting i.e., Fukuyama Transporting and BANK MANDIRI go up and down completely randomly.

Pair Corralation between Fukuyama Transporting and BANK MANDIRI

Assuming the 90 days horizon Fukuyama Transporting Co is expected to generate 0.6 times more return on investment than BANK MANDIRI. However, Fukuyama Transporting Co is 1.68 times less risky than BANK MANDIRI. It trades about 0.31 of its potential returns per unit of risk. BANK MANDIRI is currently generating about -0.16 per unit of risk. If you would invest  2,060  in Fukuyama Transporting Co on September 18, 2024 and sell it today you would earn a total of  240.00  from holding Fukuyama Transporting Co or generate 11.65% return on investment over 90 days.

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

Fukuyama Transporting Co  vs.  BANK MANDIRI

Fukuyama Transporting

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fukuyama Transporting Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Fukuyama Transporting is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the 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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Fukuyama Transporting and BANK MANDIRI

The main advantage of trading using opposite Fukuyama Transporting and BANK MANDIRI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fukuyama Transporting 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 Fukuyama Transporting Co 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..