Correlation Between BANK MANDIRI and NIKKON HOLDINGS

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

By analyzing existing cross correlation between BANK MANDIRI and NIKKON HOLDINGS TD, you can compare the effects of market volatilities on BANK MANDIRI and NIKKON HOLDINGS 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 NIKKON HOLDINGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and NIKKON HOLDINGS.

Diversification Opportunities for BANK MANDIRI and NIKKON HOLDINGS

-0.85

Correlation Coefficient

BANK MANDIRI  NIKKON HOLDINGS

Pay attention - limited upside

The 3 months correlation between BANK and NIKKON is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and NIKKON HOLDINGS TD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIKKON HOLDINGS TD 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 are associated (or correlated) with NIKKON HOLDINGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIKKON HOLDINGS TD has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and NIKKON HOLDINGS go up and down completely randomly.

Pair Corralation between BANK MANDIRI and NIKKON HOLDINGS

Assuming the 90 days trading horizon BANK MANDIRI is expected to generate 1.41 times less return on investment than NIKKON HOLDINGS. In addition to that, BANK MANDIRI is 1.49 times more volatile than NIKKON HOLDINGS TD. It trades about 0.03 of its total potential returns per unit of risk. NIKKON HOLDINGS TD is currently generating about 0.07 per unit of volatility. If you would invest  810.00  in NIKKON HOLDINGS TD on October 5, 2024 and sell it today you would earn a total of  420.00  from holding NIKKON HOLDINGS TD or generate 51.85% return on investment over 90 days.

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

BANK MANDIRI  vs.  NIKKON HOLDINGS TD

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 latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

NIKKON HOLDINGS TD

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days NIKKON HOLDINGS TD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, NIKKON HOLDINGS is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with BANK MANDIRI and NIKKON HOLDINGS

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

The idea behind BANK MANDIRI and NIKKON HOLDINGS TD 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.