Correlation Between Bank Mandiri and Sekisui House
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Sekisui House 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 Sekisui House into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Mandiri Persero and Sekisui House Ltd, you can compare the effects of market volatilities on Bank Mandiri and Sekisui House 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 Sekisui House. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Sekisui House.
Diversification Opportunities for Bank Mandiri and Sekisui House
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Sekisui is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Sekisui House Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sekisui House 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 Persero are associated (or correlated) with Sekisui House. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sekisui House has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Sekisui House go up and down completely randomly.
Pair Corralation between Bank Mandiri and Sekisui House
Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the Sekisui House. In addition to that, Bank Mandiri is 2.19 times more volatile than Sekisui House Ltd. It trades about -0.16 of its total potential returns per unit of risk. Sekisui House Ltd is currently generating about -0.08 per unit of volatility. If you would invest 2,433 in Sekisui House Ltd on December 3, 2024 and sell it today you would lose (146.00) from holding Sekisui House Ltd or give up 6.0% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Bank Mandiri Persero vs. Sekisui House Ltd
Performance |
Timeline |
Bank Mandiri Persero |
Sekisui House |
Bank Mandiri and Sekisui House Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank Mandiri and Sekisui House
The main advantage of trading using opposite Bank Mandiri and Sekisui House positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Sekisui House 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 Sekisui House will offset losses from the drop in Sekisui House's long position.Bank Mandiri vs. HDFC Bank Limited | Bank Mandiri vs. China Merchants Bank | Bank Mandiri vs. China Merchants Bank | Bank Mandiri vs. Fifth Third Bancorp |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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