Correlation Between Commerzbank and Bank Mandiri
Can any of the company-specific risk be diversified away by investing in both Commerzbank 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 Commerzbank and Bank Mandiri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commerzbank AG PK and Bank Mandiri Persero, you can compare the effects of market volatilities on Commerzbank 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 Commerzbank with a short position of Bank Mandiri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commerzbank and Bank Mandiri.
Diversification Opportunities for Commerzbank and Bank Mandiri
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Commerzbank and Bank is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Commerzbank AG PK 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 Commerzbank 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 Commerzbank AG PK 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 Commerzbank i.e., Commerzbank and Bank Mandiri go up and down completely randomly.
Pair Corralation between Commerzbank and Bank Mandiri
Assuming the 90 days horizon Commerzbank is expected to generate 1.28 times less return on investment than Bank Mandiri. But when comparing it to its historical volatility, Commerzbank AG PK is 1.92 times less risky than Bank Mandiri. It trades about 0.06 of its potential returns per unit of risk. Bank Mandiri Persero is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 35.00 in Bank Mandiri Persero on September 2, 2024 and sell it today you would earn a total of 8.00 from holding Bank Mandiri Persero or generate 22.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.32% |
| Values | Daily Returns |
Commerzbank AG PK vs. Bank Mandiri Persero
Performance |
| Timeline |
| Commerzbank AG PK |
| Bank Mandiri Persero |
Commerzbank and Bank Mandiri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commerzbank and Bank Mandiri
The main advantage of trading using opposite Commerzbank and Bank Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commerzbank 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.| Commerzbank vs. Piraeus Bank SA | Commerzbank vs. Turkiye Garanti Bankasi | Commerzbank vs. Uwharrie Capital Corp |
| Bank Mandiri vs. Piraeus Bank SA | Bank Mandiri vs. Turkiye Garanti Bankasi | Bank Mandiri vs. Uwharrie Capital Corp |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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