Correlation Between Bank of Botetourt and Bank Mandiri
Can any of the company-specific risk be diversified away by investing in both Bank of Botetourt 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 Botetourt 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 Botetourt and Bank Mandiri Persero, you can compare the effects of market volatilities on Bank of Botetourt 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 Botetourt with a short position of Bank Mandiri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Botetourt and Bank Mandiri.
Diversification Opportunities for Bank of Botetourt and Bank Mandiri
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Bank is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Botetourt 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 Botetourt 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 Botetourt 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 Botetourt i.e., Bank of Botetourt and Bank Mandiri go up and down completely randomly.
Pair Corralation between Bank of Botetourt and Bank Mandiri
Given the investment horizon of 90 days Bank of Botetourt is expected to generate 1.39 times less return on investment than Bank Mandiri. In addition to that, Bank of Botetourt is 1.09 times more volatile than Bank Mandiri Persero. It trades about 0.03 of its total potential returns per unit of risk. Bank Mandiri Persero is currently generating about 0.04 per unit of volatility. If you would invest 1,222 in Bank Mandiri Persero on August 29, 2024 and sell it today you would earn a total of 428.00 from holding Bank Mandiri Persero or generate 35.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 76.77% |
| Values | Daily Returns |
Bank of Botetourt vs. Bank Mandiri Persero
Performance |
| Timeline |
| Bank of Botetourt |
| Bank Mandiri Persero |
Bank of Botetourt and Bank Mandiri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Botetourt and Bank Mandiri
The main advantage of trading using opposite Bank of Botetourt and Bank Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Botetourt 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 Botetourt vs. Century Financial Corp | Bank of Botetourt vs. FS Bancorp | Bank of Botetourt vs. Lyons Bancorp | Bank of Botetourt vs. Solvay Bank Corp |
| Bank Mandiri vs. Israel Discount Bank | Bank Mandiri vs. Baraboo Bancorporation | Bank Mandiri vs. Danske Bank AS | Bank Mandiri vs. Jyske Bank AS |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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