Correlation Between Bank Mandiri and Medical Marijuana
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Medical Marijuana 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 Medical Marijuana 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 Medical Marijuana I, you can compare the effects of market volatilities on Bank Mandiri and Medical Marijuana 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 Medical Marijuana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Medical Marijuana.
Diversification Opportunities for Bank Mandiri and Medical Marijuana
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Medical is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Medical Marijuana I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medical Marijuana 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 Medical Marijuana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medical Marijuana has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Medical Marijuana go up and down completely randomly.
Pair Corralation between Bank Mandiri and Medical Marijuana
Assuming the 90 days horizon Bank Mandiri Persero is expected to generate 0.51 times more return on investment than Medical Marijuana. However, Bank Mandiri Persero is 1.97 times less risky than Medical Marijuana. It trades about 0.04 of its potential returns per unit of risk. Medical Marijuana I is currently generating about -0.08 per unit of risk. If you would invest 38.00 in Bank Mandiri Persero on September 1, 2024 and sell it today you would earn a total of 5.00 from holding Bank Mandiri Persero or generate 13.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Medical Marijuana I
Performance |
| Timeline |
| Bank Mandiri Persero |
| Medical Marijuana |
Bank Mandiri and Medical Marijuana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Medical Marijuana
The main advantage of trading using opposite Bank Mandiri and Medical Marijuana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Medical Marijuana 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 Medical Marijuana will offset losses from the drop in Medical Marijuana'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 |
| Medical Marijuana vs. Brainsway | Medical Marijuana vs. Venus Concept | Medical Marijuana vs. Tactile Systems Technology | Medical Marijuana vs. Icecure Medical |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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