Correlation Between Bank Mandiri and Kongsberg Gruppen
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Kongsberg Gruppen 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 Kongsberg Gruppen 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 Kongsberg Gruppen ASA, you can compare the effects of market volatilities on Bank Mandiri and Kongsberg Gruppen 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 Kongsberg Gruppen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Kongsberg Gruppen.
Diversification Opportunities for Bank Mandiri and Kongsberg Gruppen
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Kongsberg is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Kongsberg Gruppen ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kongsberg Gruppen ASA 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 Kongsberg Gruppen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kongsberg Gruppen ASA has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Kongsberg Gruppen go up and down completely randomly.
Pair Corralation between Bank Mandiri and Kongsberg Gruppen
Assuming the 90 days horizon Bank Mandiri Persero is expected to generate 1.3 times more return on investment than Kongsberg Gruppen. However, Bank Mandiri is 1.3 times more volatile than Kongsberg Gruppen ASA. It trades about 0.0 of its potential returns per unit of risk. Kongsberg Gruppen ASA is currently generating about -0.04 per unit of risk. If you would invest 45.00 in Bank Mandiri Persero on August 30, 2024 and sell it today you would lose (1.00) from holding Bank Mandiri Persero or give up 2.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Kongsberg Gruppen ASA
Performance |
| Timeline |
| Bank Mandiri Persero |
| Kongsberg Gruppen ASA |
Bank Mandiri and Kongsberg Gruppen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Kongsberg Gruppen
The main advantage of trading using opposite Bank Mandiri and Kongsberg Gruppen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Kongsberg Gruppen 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 Kongsberg Gruppen will offset losses from the drop in Kongsberg Gruppen's long position.| Bank Mandiri vs. Israel Discount Bank | Bank Mandiri vs. Danske Bank AS | Bank Mandiri vs. Absa Group Limited |
| Kongsberg Gruppen vs. Sturm Ruger | Kongsberg Gruppen vs. Ammo Inc | Kongsberg Gruppen vs. Kratos Defense Security | Kongsberg Gruppen vs. VSE Corporation |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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