Correlation Between Bank Mandiri and Lavras Gold
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Lavras Gold 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 Lavras Gold 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 Lavras Gold Corp, you can compare the effects of market volatilities on Bank Mandiri and Lavras Gold 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 Lavras Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Lavras Gold.
Diversification Opportunities for Bank Mandiri and Lavras Gold
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Lavras is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Lavras Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lavras Gold Corp 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 Lavras Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lavras Gold Corp has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Lavras Gold go up and down completely randomly.
Pair Corralation between Bank Mandiri and Lavras Gold
Assuming the 90 days horizon Bank Mandiri Persero is expected to generate 0.97 times more return on investment than Lavras Gold. However, Bank Mandiri Persero is 1.04 times less risky than Lavras Gold. It trades about -0.03 of its potential returns per unit of risk. Lavras Gold Corp is currently generating about -0.08 per unit of risk. If you would invest 45.00 in Bank Mandiri Persero on September 1, 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Lavras Gold Corp
Performance |
| Timeline |
| Bank Mandiri Persero |
| Lavras Gold Corp |
Bank Mandiri and Lavras Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Lavras Gold
The main advantage of trading using opposite Bank Mandiri and Lavras Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Lavras Gold 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 Lavras Gold will offset losses from the drop in Lavras Gold's long position.| Bank Mandiri vs. Piraeus Bank SA | Bank Mandiri vs. Turkiye Garanti Bankasi | Bank Mandiri vs. Delhi Bank Corp | Bank Mandiri vs. Uwharrie Capital Corp |
| Lavras Gold vs. Aurion Resources | Lavras Gold vs. Rio2 Limited | Lavras Gold vs. Palamina Corp | Lavras Gold vs. BTU Metals 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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