Correlation Between Bank of Hawaii and Bank Mandiri
Can any of the company-specific risk be diversified away by investing in both Bank of Hawaii 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 Bank of Hawaii and Bank Mandiri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Hawaii and Bank Mandiri Persero, you can compare the effects of market volatilities on Bank of Hawaii 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 Bank of Hawaii with a short position of Bank Mandiri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Hawaii and Bank Mandiri.
Diversification Opportunities for Bank of Hawaii and Bank Mandiri
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Bank is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Hawaii and Bank Mandiri Persero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Mandiri Persero and Bank of Hawaii 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 of Hawaii 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 Persero has no effect on the direction of Bank of Hawaii i.e., Bank of Hawaii and Bank Mandiri go up and down completely randomly.
Pair Corralation between Bank of Hawaii and Bank Mandiri
Considering the 90-day investment horizon Bank of Hawaii is expected to generate 1.34 times more return on investment than Bank Mandiri. However, Bank of Hawaii is 1.34 times more volatile than Bank Mandiri Persero. It trades about 0.23 of its potential returns per unit of risk. Bank Mandiri Persero is currently generating about -0.28 per unit of risk. If you would invest 7,167 in Bank of Hawaii on August 28, 2024 and sell it today you would earn a total of 884.00 from holding Bank of Hawaii or generate 12.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bank of Hawaii vs. Bank Mandiri Persero
Performance |
| Timeline |
| Bank of Hawaii |
| Bank Mandiri Persero |
Bank of Hawaii and Bank Mandiri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Hawaii and Bank Mandiri
The main advantage of trading using opposite Bank of Hawaii and Bank Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Hawaii 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.| Bank of Hawaii vs. Fifth Third Bancorp | Bank of Hawaii vs. Huntington Bancshares Incorporated | Bank of Hawaii vs. Comerica | Bank of Hawaii vs. MT Bank |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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