Correlation Between Bank Mandiri and Carbios SAS
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Carbios SAS 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 Carbios SAS 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 Carbios SAS, you can compare the effects of market volatilities on Bank Mandiri and Carbios SAS 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 Carbios SAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Carbios SAS.
Diversification Opportunities for Bank Mandiri and Carbios SAS
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Carbios is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Carbios SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carbios SAS 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 Carbios SAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carbios SAS has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Carbios SAS go up and down completely randomly.
Pair Corralation between Bank Mandiri and Carbios SAS
Assuming the 90 days horizon Bank Mandiri Persero is expected to generate 3.55 times more return on investment than Carbios SAS. However, Bank Mandiri is 3.55 times more volatile than Carbios SAS. It trades about 0.06 of its potential returns per unit of risk. Carbios SAS is currently generating about -0.05 per unit of risk. If you would invest 29.00 in Bank Mandiri Persero on September 16, 2024 and sell it today you would earn a total of 11.00 from holding Bank Mandiri Persero or generate 37.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 90.73% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Carbios SAS
Performance |
| Timeline |
| Bank Mandiri Persero |
| Carbios SAS |
Bank Mandiri and Carbios SAS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Carbios SAS
The main advantage of trading using opposite Bank Mandiri and Carbios SAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Carbios SAS 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 Carbios SAS will offset losses from the drop in Carbios SAS's long position.| Bank Mandiri vs. Morningstar Unconstrained Allocation | Bank Mandiri vs. Bondbloxx ETF Trust | Bank Mandiri vs. Spring Valley Acquisition | Bank Mandiri vs. Bondbloxx ETF Trust |
| Carbios SAS vs. Chemours Co | Carbios SAS vs. International Flavors Fragrances | Carbios SAS vs. Air Products and | Carbios SAS vs. PPG Industries |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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