Correlation Between Bank Mandiri and Atlantic Union
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Atlantic Union 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 Mandiri and Atlantic Union into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Mandiri Persero and Atlantic Union Bankshares, you can compare the effects of market volatilities on Bank Mandiri and Atlantic Union 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 Mandiri with a short position of Atlantic Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Atlantic Union.
Diversification Opportunities for Bank Mandiri and Atlantic Union
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Atlantic is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Atlantic Union Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantic Union Bankshares and Bank Mandiri 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 Mandiri Persero are associated (or correlated) with Atlantic Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantic Union Bankshares has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Atlantic Union go up and down completely randomly.
Pair Corralation between Bank Mandiri and Atlantic Union
Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the Atlantic Union. In addition to that, Bank Mandiri is 5.95 times more volatile than Atlantic Union Bankshares. It trades about -0.17 of its total potential returns per unit of risk. Atlantic Union Bankshares is currently generating about 0.16 per unit of volatility. If you would invest 2,440 in Atlantic Union Bankshares on August 27, 2024 and sell it today you would earn a total of 50.00 from holding Atlantic Union Bankshares or generate 2.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Atlantic Union Bankshares
Performance |
| Timeline |
| Bank Mandiri Persero |
| Atlantic Union Bankshares |
Bank Mandiri and Atlantic Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Atlantic Union
The main advantage of trading using opposite Bank Mandiri and Atlantic Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Atlantic Union 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 Atlantic Union will offset losses from the drop in Atlantic Union's long position.The idea behind Bank Mandiri Persero and Atlantic Union Bankshares pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Atlantic Union vs. HDFC Bank Limited | Atlantic Union vs. China Merchants Bank | Atlantic Union vs. China Merchants Bank | Atlantic Union vs. Fifth Third Bancorp |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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