Correlation Between MidCap Financial and BANK MANDIRI
Can any of the company-specific risk be diversified away by investing in both MidCap Financial and BANK MANDIRI 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 MidCap Financial and BANK MANDIRI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MidCap Financial Investment and BANK MANDIRI, you can compare the effects of market volatilities on MidCap Financial and BANK MANDIRI 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 MidCap Financial with a short position of BANK MANDIRI. Check out your portfolio center. Please also check ongoing floating volatility patterns of MidCap Financial and BANK MANDIRI.
Diversification Opportunities for MidCap Financial and BANK MANDIRI
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MidCap and BANK is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding MidCap Financial Investment and BANK MANDIRI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK MANDIRI and MidCap Financial 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 MidCap Financial Investment are associated (or correlated) with BANK MANDIRI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK MANDIRI has no effect on the direction of MidCap Financial i.e., MidCap Financial and BANK MANDIRI go up and down completely randomly.
Pair Corralation between MidCap Financial and BANK MANDIRI
Assuming the 90 days trading horizon MidCap Financial is expected to generate 13.56 times less return on investment than BANK MANDIRI. But when comparing it to its historical volatility, MidCap Financial Investment is 8.16 times less risky than BANK MANDIRI. It trades about 0.05 of its potential returns per unit of risk. BANK MANDIRI is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 30.00 in BANK MANDIRI on October 25, 2024 and sell it today you would earn a total of 2.00 from holding BANK MANDIRI or generate 6.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MidCap Financial Investment vs. BANK MANDIRI
Performance |
| Timeline |
| MidCap Financial Inv |
| BANK MANDIRI |
MidCap Financial and BANK MANDIRI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MidCap Financial and BANK MANDIRI
The main advantage of trading using opposite MidCap Financial and BANK MANDIRI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MidCap Financial position performs unexpectedly, BANK MANDIRI 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 MANDIRI will offset losses from the drop in BANK MANDIRI's long position.| MidCap Financial vs. ANTA SPORTS PRODUCT | MidCap Financial vs. COLUMBIA SPORTSWEAR | MidCap Financial vs. ON SEMICONDUCTOR | MidCap Financial vs. PLAY2CHILL SA ZY |
| BANK MANDIRI vs. Gaztransport Technigaz SA | BANK MANDIRI vs. CHRYSALIS INVESTMENTS LTD | BANK MANDIRI vs. MidCap Financial Investment | BANK MANDIRI vs. Transport International Holdings |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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