Correlation Between Bank Central and Mentor Capital
Can any of the company-specific risk be diversified away by investing in both Bank Central and Mentor Capital 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 Bank Central and Mentor Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Central Asia and Mentor Capital, you can compare the effects of market volatilities on Bank Central and Mentor Capital 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 Bank Central with a short position of Mentor Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Central and Mentor Capital.
Diversification Opportunities for Bank Central and Mentor Capital
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Mentor is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia and Mentor Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mentor Capital and Bank Central 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 Bank Central Asia are associated (or correlated) with Mentor Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mentor Capital has no effect on the direction of Bank Central i.e., Bank Central and Mentor Capital go up and down completely randomly.
Pair Corralation between Bank Central and Mentor Capital
Assuming the 90 days horizon Bank Central Asia is expected to generate 0.23 times more return on investment than Mentor Capital. However, Bank Central Asia is 4.41 times less risky than Mentor Capital. It trades about 0.03 of its potential returns per unit of risk. Mentor Capital is currently generating about -0.06 per unit of risk. If you would invest 1,462 in Bank Central Asia on October 24, 2024 and sell it today you would earn a total of 12.00 from holding Bank Central Asia or generate 0.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Central Asia vs. Mentor Capital
Performance |
| Timeline |
| Bank Central Asia |
| Mentor Capital |
Bank Central and Mentor Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Central and Mentor Capital
The main advantage of trading using opposite Bank Central and Mentor Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Central position performs unexpectedly, Mentor Capital 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 Mentor Capital will offset losses from the drop in Mentor Capital's long position.| Bank Central vs. Nedbank Group | Bank Central vs. Standard Bank Group | Bank Central vs. Kasikornbank Public Co | Bank Central vs. KBC Groep NV |
| Mentor Capital vs. Cipher Mining | Mentor Capital vs. Terawulf | Mentor Capital vs. Iris Energy | Mentor Capital vs. Stronghold Digital Mining |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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