Correlation Between Bank Mandiri and Newport Exploration
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Newport Exploration 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 Newport Exploration 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 Newport Exploration, you can compare the effects of market volatilities on Bank Mandiri and Newport Exploration 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 Newport Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Newport Exploration.
Diversification Opportunities for Bank Mandiri and Newport Exploration
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Newport is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Newport Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newport Exploration 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 Newport Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newport Exploration has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Newport Exploration go up and down completely randomly.
Pair Corralation between Bank Mandiri and Newport Exploration
Assuming the 90 days horizon Bank Mandiri is expected to generate 12.51 times less return on investment than Newport Exploration. But when comparing it to its historical volatility, Bank Mandiri Persero is 6.03 times less risky than Newport Exploration. It trades about 0.04 of its potential returns per unit of risk. Newport Exploration is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Newport Exploration on September 12, 2024 and sell it today you would lose (11.00) from holding Newport Exploration or give up 64.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 84.1% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Newport Exploration
Performance |
| Timeline |
| Bank Mandiri Persero |
| Newport Exploration |
Bank Mandiri and Newport Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Newport Exploration
The main advantage of trading using opposite Bank Mandiri and Newport Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Newport Exploration 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 Newport Exploration will offset losses from the drop in Newport Exploration's long position.| Bank Mandiri vs. PT Bank Rakyat | Bank Mandiri vs. Morningstar Unconstrained Allocation | Bank Mandiri vs. Bondbloxx ETF Trust | Bank Mandiri vs. Spring Valley Acquisition |
| Newport Exploration vs. Traction Uranium Corp | Newport Exploration vs. New Age Metals | Newport Exploration vs. York Harbour Metals | Newport Exploration vs. Silver Elephant Mining |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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