Correlation Between BANK MANDIRI and WPP -

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

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

Diversification Opportunities for BANK MANDIRI and WPP -

-0.76

Correlation Coefficient

BANK MANDIRI  WPP -

Pay attention - limited upside

The 3 months correlation between BANK and WPP is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and WPP Dusseldorf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WPP Dusseldorf 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 WPP -. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WPP Dusseldorf has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and WPP - go up and down completely randomly.

Pair Corralation between BANK MANDIRI and WPP -

Assuming the 90 days trading horizon BANK MANDIRI is expected to under-perform the WPP -. In addition to that, BANK MANDIRI is 4.69 times more volatile than WPP Dusseldorf. It trades about -0.03 of its total potential returns per unit of risk. WPP Dusseldorf is currently generating about 0.01 per unit of volatility. If you would invest  990.00  in WPP Dusseldorf on October 6, 2024 and sell it today you would earn a total of  0.00  from holding WPP Dusseldorf or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	97.44%
Values	Daily Returns

BANK MANDIRI  vs.  WPP Dusseldorf

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.

WPP Dusseldorf

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WPP Dusseldorf has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, WPP - is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with BANK MANDIRI and WPP -

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

The idea behind BANK MANDIRI and WPP Dusseldorf 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.

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 Bonds Directory module to find actively traded corporate debentures issued by US companies.