Correlation Between BANK MANDIRI and BANDAI NAMCO
Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI and BANDAI NAMCO 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 BANDAI NAMCO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK MANDIRI and BANDAI NAMCO Holdings, you can compare the effects of market volatilities on BANK MANDIRI and BANDAI NAMCO 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 BANDAI NAMCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and BANDAI NAMCO.
Diversification Opportunities for BANK MANDIRI and BANDAI NAMCO
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BANK and BANDAI is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and BANDAI NAMCO Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANDAI NAMCO Holdings 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 BANDAI NAMCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANDAI NAMCO Holdings has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and BANDAI NAMCO go up and down completely randomly.
Pair Corralation between BANK MANDIRI and BANDAI NAMCO
Assuming the 90 days trading horizon BANK MANDIRI is expected to under-perform the BANDAI NAMCO. But the stock apears to be less risky and, when comparing its historical volatility, BANK MANDIRI is 6.03 times less risky than BANDAI NAMCO. The stock trades about -0.14 of its potential returns per unit of risk. The BANDAI NAMCO Holdings is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 973.00 in BANDAI NAMCO Holdings on September 25, 2024 and sell it today you would earn a total of 1,323 from holding BANDAI NAMCO Holdings or generate 135.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 98.46% |
Values | Daily Returns |
BANK MANDIRI vs. BANDAI NAMCO Holdings
Performance |
Timeline |
BANK MANDIRI |
BANDAI NAMCO Holdings |
BANK MANDIRI and BANDAI NAMCO Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BANK MANDIRI and BANDAI NAMCO
The main advantage of trading using opposite BANK MANDIRI and BANDAI NAMCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK MANDIRI position performs unexpectedly, BANDAI NAMCO 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 BANDAI NAMCO will offset losses from the drop in BANDAI NAMCO's long position.BANK MANDIRI vs. Apple Inc | BANK MANDIRI vs. Apple Inc | BANK MANDIRI vs. Apple Inc | BANK MANDIRI vs. Microsoft |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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