Correlation Between Bank Mandiri and Legible
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Legible 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 Legible 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 Legible, you can compare the effects of market volatilities on Bank Mandiri and Legible 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 Legible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Legible.
Diversification Opportunities for Bank Mandiri and Legible
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Legible is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Legible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legible 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 Legible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legible has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Legible go up and down completely randomly.
Pair Corralation between Bank Mandiri and Legible
Assuming the 90 days horizon Bank Mandiri Persero is expected to generate 0.25 times more return on investment than Legible. However, Bank Mandiri Persero is 4.02 times less risky than Legible. It trades about -0.03 of its potential returns per unit of risk. Legible is currently generating about -0.01 per unit of risk. If you would invest 45.00 in Bank Mandiri Persero on September 2, 2024 and sell it today you would lose (2.00) from holding Bank Mandiri Persero or give up 4.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Legible
Performance |
| Timeline |
| Bank Mandiri Persero |
| Legible |
Bank Mandiri and Legible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Legible
The main advantage of trading using opposite Bank Mandiri and Legible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Legible 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 Legible will offset losses from the drop in Legible's long position.| Bank Mandiri vs. Piraeus Bank SA | Bank Mandiri vs. Turkiye Garanti Bankasi | Bank Mandiri vs. Uwharrie Capital Corp |
| Legible vs. Slate Office REIT | Legible vs. HUMANA INC | Legible vs. Aquagold International | Legible vs. Barloworld Ltd ADR |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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