Correlation Between Ming Le and BANK MANDIRI
Can any of the company-specific risk be diversified away by investing in both Ming Le 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 Ming Le and BANK MANDIRI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ming Le Sports and BANK MANDIRI, you can compare the effects of market volatilities on Ming Le 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 Ming Le with a short position of BANK MANDIRI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ming Le and BANK MANDIRI.
Diversification Opportunities for Ming Le and BANK MANDIRI
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ming and BANK is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Ming Le Sports and BANK MANDIRI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK MANDIRI and Ming Le 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 Ming Le Sports 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 has no effect on the direction of Ming Le i.e., Ming Le and BANK MANDIRI go up and down completely randomly.
Pair Corralation between Ming Le and BANK MANDIRI
Assuming the 90 days trading horizon Ming Le is expected to generate 3.33 times less return on investment than BANK MANDIRI. But when comparing it to its historical volatility, Ming Le Sports is 1.91 times less risky than BANK MANDIRI. It trades about 0.02 of its potential returns per unit of risk. BANK MANDIRI is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 27.00 in BANK MANDIRI on September 5, 2024 and sell it today you would earn a total of 6.00 from holding BANK MANDIRI or generate 22.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Ming Le Sports vs. BANK MANDIRI
Performance |
| Timeline |
| Ming Le Sports |
| BANK MANDIRI |
Ming Le and BANK MANDIRI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ming Le and BANK MANDIRI
The main advantage of trading using opposite Ming Le and BANK MANDIRI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ming Le 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.| Ming Le vs. Tyson Foods | Ming Le vs. SMA Solar Technology | Ming Le vs. Cal Maine Foods | Ming Le vs. Food Life Companies |
| BANK MANDIRI vs. Electronic Arts | BANK MANDIRI vs. Gaztransport Technigaz SA | BANK MANDIRI vs. NTG Nordic Transport | BANK MANDIRI vs. Ming Le Sports |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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