Correlation Between Bank Mandiri and COSCO SHIPPING
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and COSCO SHIPPING 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 COSCO SHIPPING 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 COSCO SHIPPING Holdings, you can compare the effects of market volatilities on Bank Mandiri and COSCO SHIPPING 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 COSCO SHIPPING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and COSCO SHIPPING.
Diversification Opportunities for Bank Mandiri and COSCO SHIPPING
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and COSCO is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and COSCO SHIPPING Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSCO SHIPPING Holdings 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 COSCO SHIPPING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSCO SHIPPING Holdings has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and COSCO SHIPPING go up and down completely randomly.
Pair Corralation between Bank Mandiri and COSCO SHIPPING
Assuming the 90 days horizon Bank Mandiri Persero is expected to generate 0.58 times more return on investment than COSCO SHIPPING. However, Bank Mandiri Persero is 1.74 times less risky than COSCO SHIPPING. It trades about 0.05 of its potential returns per unit of risk. COSCO SHIPPING Holdings is currently generating about 0.02 per unit of risk. If you would invest 38.00 in Bank Mandiri Persero on August 30, 2024 and sell it today you would earn a total of 6.00 from holding Bank Mandiri Persero or generate 15.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Bank Mandiri Persero vs. COSCO SHIPPING Holdings
Performance |
| Timeline |
| Bank Mandiri Persero |
| COSCO SHIPPING Holdings |
Bank Mandiri and COSCO SHIPPING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and COSCO SHIPPING
The main advantage of trading using opposite Bank Mandiri and COSCO SHIPPING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, COSCO SHIPPING 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 COSCO SHIPPING will offset losses from the drop in COSCO SHIPPING's long position.The idea behind Bank Mandiri Persero and COSCO SHIPPING Holdings 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.| COSCO SHIPPING vs. SITC International Holdings | COSCO SHIPPING vs. Orient Overseas Limited | COSCO SHIPPING vs. Pacific Basin Shipping | COSCO SHIPPING vs. SITC International Holdings |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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