Correlation Between Bank Mandiri and Protect Pharmaceutical
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Protect Pharmaceutical 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 Protect Pharmaceutical 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 Protect Pharmaceutical, you can compare the effects of market volatilities on Bank Mandiri and Protect Pharmaceutical 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 Protect Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Protect Pharmaceutical.
Diversification Opportunities for Bank Mandiri and Protect Pharmaceutical
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Protect is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Protect Pharmaceutical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protect Pharmaceutical 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 Protect Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protect Pharmaceutical has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Protect Pharmaceutical go up and down completely randomly.
Pair Corralation between Bank Mandiri and Protect Pharmaceutical
Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the Protect Pharmaceutical. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Mandiri Persero is 1.3 times less risky than Protect Pharmaceutical. The pink sheet trades about -0.1 of its potential returns per unit of risk. The Protect Pharmaceutical is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 60.00 in Protect Pharmaceutical on November 27, 2024 and sell it today you would earn a total of 49.00 from holding Protect Pharmaceutical or generate 81.67% 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. Protect Pharmaceutical
Performance |
| Timeline |
| Bank Mandiri Persero |
| Protect Pharmaceutical |
Bank Mandiri and Protect Pharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Protect Pharmaceutical
The main advantage of trading using opposite Bank Mandiri and Protect Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Protect Pharmaceutical 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 Protect Pharmaceutical will offset losses from the drop in Protect Pharmaceutical's long position.| Bank Mandiri vs. PT Bank Rakyat | Bank Mandiri vs. Piraeus Bank SA | Bank Mandiri vs. Eurobank Ergasias Services | Bank Mandiri vs. Zions Bancorporation |
| Protect Pharmaceutical vs. Universal Power Industry | Protect Pharmaceutical vs. National Health Scan | Protect Pharmaceutical vs. World Oil Group | Protect Pharmaceutical vs. Global Tech Industries |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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