Correlation Between Bank Mandiri and First National
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and First National 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 First National 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 First National of, you can compare the effects of market volatilities on Bank Mandiri and First National 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 First National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and First National.
Diversification Opportunities for Bank Mandiri and First National
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and First is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and First National of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First National 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 First National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First National has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and First National go up and down completely randomly.
Pair Corralation between Bank Mandiri and First National
Assuming the 90 days horizon Bank Mandiri Persero is expected to generate 2.42 times more return on investment than First National. However, Bank Mandiri is 2.42 times more volatile than First National of. It trades about 0.04 of its potential returns per unit of risk. First National of is currently generating about 0.0 per unit of risk. If you would invest 35.00 in Bank Mandiri Persero on September 2, 2024 and sell it today you would earn a total of 8.00 from holding Bank Mandiri Persero or generate 22.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.18% |
| Values | Daily Returns |
Bank Mandiri Persero vs. First National of
Performance |
| Timeline |
| Bank Mandiri Persero |
| First National |
Bank Mandiri and First National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and First National
The main advantage of trading using opposite Bank Mandiri and First National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, First National 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 First National will offset losses from the drop in First National's long position.| Bank Mandiri vs. Piraeus Bank SA | Bank Mandiri vs. Turkiye Garanti Bankasi | Bank Mandiri vs. Uwharrie Capital Corp |
| First National vs. Washington Business Bank | First National vs. National Capital Bank | First National vs. Community Heritage Financial | First National vs. Citizens Financial 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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