Correlation Between Bank Mandiri and Ngx Energy
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Ngx Energy 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 Ngx Energy 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 Ngx Energy International, you can compare the effects of market volatilities on Bank Mandiri and Ngx Energy 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 Ngx Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Ngx Energy.
Diversification Opportunities for Bank Mandiri and Ngx Energy
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Ngx is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Ngx Energy International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ngx Energy International 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 Ngx Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ngx Energy International has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Ngx Energy go up and down completely randomly.
Pair Corralation between Bank Mandiri and Ngx Energy
Assuming the 90 days horizon Bank Mandiri Persero is expected to generate 1.18 times more return on investment than Ngx Energy. However, Bank Mandiri is 1.18 times more volatile than Ngx Energy International. It trades about 0.06 of its potential returns per unit of risk. Ngx Energy International is currently generating about 0.03 per unit of risk. If you would invest 36.00 in Bank Mandiri Persero on August 29, 2024 and sell it today you would earn a total of 8.00 from holding Bank Mandiri Persero or generate 22.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Ngx Energy International
Performance |
| Timeline |
| Bank Mandiri Persero |
| Ngx Energy International |
Bank Mandiri and Ngx Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Ngx Energy
The main advantage of trading using opposite Bank Mandiri and Ngx Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Ngx Energy 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 Ngx Energy will offset losses from the drop in Ngx Energy's 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 |
| Ngx Energy vs. Permian Resources | Ngx Energy vs. Devon Energy | Ngx Energy vs. EOG Resources | Ngx Energy vs. Coterra Energy |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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