Correlation Between Israel Discount and Bank Mandiri
Can any of the company-specific risk be diversified away by investing in both Israel Discount 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 Israel Discount and Bank Mandiri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Israel Discount Bank and Bank Mandiri Persero, you can compare the effects of market volatilities on Israel Discount 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 Israel Discount with a short position of Bank Mandiri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel Discount and Bank Mandiri.
Diversification Opportunities for Israel Discount and Bank Mandiri
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Israel and Bank is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Israel Discount Bank 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 Israel Discount 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 Israel Discount Bank 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 Israel Discount i.e., Israel Discount and Bank Mandiri go up and down completely randomly.
Pair Corralation between Israel Discount and Bank Mandiri
Assuming the 90 days horizon Israel Discount Bank is expected to generate 3.41 times more return on investment than Bank Mandiri. However, Israel Discount is 3.41 times more volatile than Bank Mandiri Persero. It trades about 0.03 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 5,751 in Israel Discount Bank on August 30, 2024 and sell it today you would earn a total of 68.00 from holding Israel Discount Bank or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 80.0% |
| Values | Daily Returns |
Israel Discount Bank vs. Bank Mandiri Persero
Performance |
| Timeline |
| Israel Discount Bank |
| Bank Mandiri Persero |
Israel Discount and Bank Mandiri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel Discount and Bank Mandiri
The main advantage of trading using opposite Israel Discount and Bank Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel Discount 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.| Israel Discount vs. Baraboo Bancorporation | Israel Discount vs. Schweizerische Nationalbank | Israel Discount vs. Danske Bank AS | Israel Discount vs. Absa Group Limited |
| 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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