Correlation Between Bank Mandiri and Denbury Resources
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Denbury Resources 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 Denbury Resources 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 Denbury Resources, you can compare the effects of market volatilities on Bank Mandiri and Denbury Resources 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 Denbury Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Denbury Resources.
Diversification Opportunities for Bank Mandiri and Denbury Resources
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Denbury is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Denbury Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Denbury Resources 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 Denbury Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Denbury Resources has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Denbury Resources go up and down completely randomly.
Pair Corralation between Bank Mandiri and Denbury Resources
Assuming the 90 days horizon Bank Mandiri Persero is expected to generate 8.32 times more return on investment than Denbury Resources. However, Bank Mandiri is 8.32 times more volatile than Denbury Resources. It trades about 0.06 of its potential returns per unit of risk. Denbury Resources is currently generating about 0.0 per unit of risk. If you would invest 28.00 in Bank Mandiri Persero on September 3, 2024 and sell it today you would earn a total of 15.00 from holding Bank Mandiri Persero or generate 53.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 31.0% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Denbury Resources
Performance |
| Timeline |
| Bank Mandiri Persero |
| Denbury Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank Mandiri and Denbury Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Denbury Resources
The main advantage of trading using opposite Bank Mandiri and Denbury Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Denbury Resources 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 Denbury Resources will offset losses from the drop in Denbury Resources' long position.| Bank Mandiri vs. PT Bank Rakyat | Bank Mandiri vs. Piraeus Bank SA | Bank Mandiri vs. Eurobank Ergasias Services | Bank Mandiri vs. Zions Bancorporation |
| Denbury Resources vs. Matador Resources | Denbury Resources vs. Murphy Oil | Denbury Resources vs. Civitas Resources | Denbury Resources vs. Chord Energy Corp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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