Correlation Between Ateliers Mecaniques and Bank Mayapada
Can any of the company-specific risk be diversified away by investing in both Ateliers Mecaniques and Bank Mayapada 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 Ateliers Mecaniques and Bank Mayapada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ateliers Mecaniques DIndonesie and Bank Mayapada Internasional, you can compare the effects of market volatilities on Ateliers Mecaniques and Bank Mayapada 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 Ateliers Mecaniques with a short position of Bank Mayapada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ateliers Mecaniques and Bank Mayapada.
Diversification Opportunities for Ateliers Mecaniques and Bank Mayapada
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ateliers and Bank is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ateliers Mecaniques DIndonesie and Bank Mayapada Internasional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Mayapada Intern and Ateliers Mecaniques 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 Ateliers Mecaniques DIndonesie are associated (or correlated) with Bank Mayapada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Mayapada Intern has no effect on the direction of Ateliers Mecaniques i.e., Ateliers Mecaniques and Bank Mayapada go up and down completely randomly.
Pair Corralation between Ateliers Mecaniques and Bank Mayapada
Assuming the 90 days trading horizon Ateliers Mecaniques DIndonesie is expected to generate 0.9 times more return on investment than Bank Mayapada. However, Ateliers Mecaniques DIndonesie is 1.12 times less risky than Bank Mayapada. It trades about 0.0 of its potential returns per unit of risk. Bank Mayapada Internasional is currently generating about -0.11 per unit of risk. If you would invest 14,700 in Ateliers Mecaniques DIndonesie on January 21, 2024 and sell it today you would lose (100.00) from holding Ateliers Mecaniques DIndonesie or give up 0.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ateliers Mecaniques DIndonesie vs. Bank Mayapada Internasional
Performance |
| Timeline |
| Ateliers Mecaniques |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Bank Mayapada Intern |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Ateliers Mecaniques and Bank Mayapada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ateliers Mecaniques and Bank Mayapada
The main advantage of trading using opposite Ateliers Mecaniques and Bank Mayapada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ateliers Mecaniques position performs unexpectedly, Bank Mayapada 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 Bank Mayapada will offset losses from the drop in Bank Mayapada's long position.| Ateliers Mecaniques vs. Arita Prima Indonesia | Ateliers Mecaniques vs. Betonjaya Manunggal Tbk | Ateliers Mecaniques vs. Alkindo Naratama Tbk | Ateliers Mecaniques vs. Trisula Textile Industries |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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