Correlation Between Eurobank Ergasias and Bank Mandiri
Can any of the company-specific risk be diversified away by investing in both Eurobank Ergasias 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 Eurobank Ergasias and Bank Mandiri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eurobank Ergasias Services and Bank Mandiri Persero, you can compare the effects of market volatilities on Eurobank Ergasias 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 Eurobank Ergasias with a short position of Bank Mandiri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eurobank Ergasias and Bank Mandiri.
Diversification Opportunities for Eurobank Ergasias and Bank Mandiri
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eurobank and Bank is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Eurobank Ergasias Services 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 Eurobank Ergasias 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 Eurobank Ergasias Services 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 Eurobank Ergasias i.e., Eurobank Ergasias and Bank Mandiri go up and down completely randomly.
Pair Corralation between Eurobank Ergasias and Bank Mandiri
Assuming the 90 days horizon Eurobank Ergasias Services is expected to generate 0.2 times more return on investment than Bank Mandiri. However, Eurobank Ergasias Services is 5.11 times less risky than Bank Mandiri. It trades about -0.17 of its potential returns per unit of risk. Bank Mandiri Persero is currently generating about -0.1 per unit of risk. If you would invest 215.00 in Eurobank Ergasias Services on August 28, 2024 and sell it today you would lose (6.00) from holding Eurobank Ergasias Services or give up 2.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eurobank Ergasias Services vs. Bank Mandiri Persero
Performance |
| Timeline |
| Eurobank Ergasias |
| Bank Mandiri Persero |
Eurobank Ergasias and Bank Mandiri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eurobank Ergasias and Bank Mandiri
The main advantage of trading using opposite Eurobank Ergasias and Bank Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eurobank Ergasias 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.| Eurobank Ergasias vs. Franklin Street Properties | Eurobank Ergasias vs. Molson Coors Brewing | Eurobank Ergasias vs. Addus HomeCare | Eurobank Ergasias vs. JBG SMITH Properties |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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