Correlation Between Bank Mandiri and Fks Multi
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Fks Multi 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 Fks Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Mandiri Persero and Fks Multi Agro, you can compare the effects of market volatilities on Bank Mandiri and Fks Multi 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 Fks Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Fks Multi.
Diversification Opportunities for Bank Mandiri and Fks Multi
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Fks is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Fks Multi Agro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fks Multi Agro 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 Persero are associated (or correlated) with Fks Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fks Multi Agro has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Fks Multi go up and down completely randomly.
Pair Corralation between Bank Mandiri and Fks Multi
Assuming the 90 days trading horizon Bank Mandiri is expected to generate 6.33 times less return on investment than Fks Multi. But when comparing it to its historical volatility, Bank Mandiri Persero is 1.02 times less risky than Fks Multi. It trades about 0.03 of its potential returns per unit of risk. Fks Multi Agro is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 514,623 in Fks Multi Agro on September 4, 2024 and sell it today you would earn a total of 567,877 from holding Fks Multi Agro or generate 110.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.57% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Fks Multi Agro
Performance |
| Timeline |
| Bank Mandiri Persero |
| Fks Multi Agro |
Bank Mandiri and Fks Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Fks Multi
The main advantage of trading using opposite Bank Mandiri and Fks Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Fks Multi 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 Fks Multi will offset losses from the drop in Fks Multi's long position.| Bank Mandiri vs. Bank Rakyat Indonesia | Bank Mandiri vs. Bank Central Asia | Bank Mandiri vs. Bank Negara Indonesia | Bank Mandiri vs. Astra International Tbk |
| Fks Multi vs. Astra International Tbk | Fks Multi vs. Unilever Indonesia Tbk | Fks Multi vs. Telkom Indonesia Tbk | Fks Multi vs. Bank Mandiri Persero |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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