Correlation Between Bank Mandiri and Cannara Biotech
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Cannara Biotech 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 Cannara Biotech 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 Cannara Biotech, you can compare the effects of market volatilities on Bank Mandiri and Cannara Biotech 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 Cannara Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Cannara Biotech.
Diversification Opportunities for Bank Mandiri and Cannara Biotech
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Cannara is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Cannara Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cannara Biotech 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 Cannara Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cannara Biotech has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Cannara Biotech go up and down completely randomly.
Pair Corralation between Bank Mandiri and Cannara Biotech
Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the Cannara Biotech. In addition to that, Bank Mandiri is 1.25 times more volatile than Cannara Biotech. It trades about -0.07 of its total potential returns per unit of risk. Cannara Biotech is currently generating about 0.47 per unit of volatility. If you would invest 54.00 in Cannara Biotech on November 4, 2024 and sell it today you would earn a total of 21.00 from holding Cannara Biotech or generate 38.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Cannara Biotech
Performance |
| Timeline |
| Bank Mandiri Persero |
| Cannara Biotech |
Bank Mandiri and Cannara Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Cannara Biotech
The main advantage of trading using opposite Bank Mandiri and Cannara Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Cannara Biotech 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 Cannara Biotech will offset losses from the drop in Cannara Biotech's long position.| Bank Mandiri vs. Banco De Chile | Bank Mandiri vs. Banco Santander Brasil | Bank Mandiri vs. CrossFirst Bankshares | Bank Mandiri vs. Banco Bradesco SA |
| Cannara Biotech vs. Benchmark Botanics | Cannara Biotech vs. Speakeasy Cannabis Club | Cannara Biotech vs. City View Green | Cannara Biotech vs. BC Craft Supply |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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