Correlation Between Bank Mandiri and Priorityome Fund
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Priorityome Fund 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 Priorityome Fund 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 Priorityome Fund, you can compare the effects of market volatilities on Bank Mandiri and Priorityome Fund 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 Priorityome Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Priorityome Fund.
Diversification Opportunities for Bank Mandiri and Priorityome Fund
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Priorityome is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Priorityome Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Priorityome Fund 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 Priorityome Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Priorityome Fund has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Priorityome Fund go up and down completely randomly.
Pair Corralation between Bank Mandiri and Priorityome Fund
Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the Priorityome Fund. In addition to that, Bank Mandiri is 6.03 times more volatile than Priorityome Fund. It trades about -0.09 of its total potential returns per unit of risk. Priorityome Fund is currently generating about -0.06 per unit of volatility. If you would invest 2,447 in Priorityome Fund on August 28, 2024 and sell it today you would lose (22.00) from holding Priorityome Fund or give up 0.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Priorityome Fund
Performance |
| Timeline |
| Bank Mandiri Persero |
| Priorityome Fund |
Bank Mandiri and Priorityome Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Priorityome Fund
The main advantage of trading using opposite Bank Mandiri and Priorityome Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Priorityome Fund 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 Priorityome Fund will offset losses from the drop in Priorityome Fund's long position.The idea behind Bank Mandiri Persero and Priorityome Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Priorityome Fund vs. The Gabelli Multimedia | Priorityome Fund vs. The Gabelli Multimedia | Priorityome Fund vs. The Gabelli Dividend | Priorityome Fund vs. The Gabelli Equity |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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