Correlation Between Cisco Systems and Bank Mandiri
Can any of the company-specific risk be diversified away by investing in both Cisco Systems 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 Cisco Systems and Bank Mandiri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisco Systems and Bank Mandiri Persero, you can compare the effects of market volatilities on Cisco Systems 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 Cisco Systems with a short position of Bank Mandiri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and Bank Mandiri.
Diversification Opportunities for Cisco Systems and Bank Mandiri
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cisco and Bank is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems 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 Cisco Systems 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 Cisco Systems 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 Cisco Systems i.e., Cisco Systems and Bank Mandiri go up and down completely randomly.
Pair Corralation between Cisco Systems and Bank Mandiri
Given the investment horizon of 90 days Cisco Systems is expected to generate 0.66 times more return on investment than Bank Mandiri. However, Cisco Systems is 1.52 times less risky than Bank Mandiri. It trades about 0.16 of its potential returns per unit of risk. Bank Mandiri Persero is currently generating about 0.04 per unit of risk. If you would invest 4,554 in Cisco Systems on August 24, 2024 and sell it today you would earn a total of 1,202 from holding Cisco Systems or generate 26.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cisco Systems vs. Bank Mandiri Persero
Performance |
| Timeline |
| Cisco Systems |
| Bank Mandiri Persero |
Cisco Systems and Bank Mandiri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and Bank Mandiri
The main advantage of trading using opposite Cisco Systems and Bank Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems 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.| Cisco Systems vs. NETGEAR | Cisco Systems vs. Small Cap Core | Cisco Systems vs. Morningstar Unconstrained Allocation | Cisco Systems vs. Mutual Of America |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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