Correlation Between PT Bank and NAMCO BANDAI

Can any of the company-specific risk be diversified away by investing in both PT Bank and NAMCO BANDAI 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 PT Bank and NAMCO BANDAI into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PT Bank Mandiri and NAMCO BANDAI HLDG, you can compare the effects of market volatilities on PT Bank and NAMCO BANDAI 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 PT Bank with a short position of NAMCO BANDAI. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and NAMCO BANDAI.

Diversification Opportunities for PT Bank and NAMCO BANDAI

-0.37

Correlation Coefficient

PT Bank  NAMCO BANDAI

Very good diversification

The 3 months correlation between PQ9 and NAMCO is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Mandiri and NAMCO BANDAI HLDG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NAMCO BANDAI HLDG and PT Bank 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 PT Bank Mandiri are associated (or correlated) with NAMCO BANDAI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NAMCO BANDAI HLDG has no effect on the direction of PT Bank i.e., PT Bank and NAMCO BANDAI go up and down completely randomly.

Pair Corralation between PT Bank and NAMCO BANDAI

If you would invest (100.00) in NAMCO BANDAI HLDG on October 6, 2024 and sell it today you would earn a total of  100.00  from holding NAMCO BANDAI HLDG or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

PT Bank Mandiri  vs.  NAMCO BANDAI HLDG

PT Bank Mandiri

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Bank Mandiri has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

NAMCO BANDAI HLDG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NAMCO BANDAI HLDG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, NAMCO BANDAI is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with PT Bank and NAMCO BANDAI

The main advantage of trading using opposite PT Bank and NAMCO BANDAI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, NAMCO BANDAI 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 NAMCO BANDAI will offset losses from the drop in NAMCO BANDAI's long position.

The idea behind PT Bank Mandiri and NAMCO BANDAI HLDG 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.