Correlation Between Bank Mandiri and Pieridae Energy
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Pieridae Energy 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 Pieridae Energy 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 Pieridae Energy Limited, you can compare the effects of market volatilities on Bank Mandiri and Pieridae Energy 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 Pieridae Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Pieridae Energy.
Diversification Opportunities for Bank Mandiri and Pieridae Energy
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Pieridae is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Pieridae Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pieridae Energy 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 Pieridae Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pieridae Energy has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Pieridae Energy go up and down completely randomly.
Pair Corralation between Bank Mandiri and Pieridae Energy
Assuming the 90 days horizon Bank Mandiri Persero is expected to generate 0.65 times more return on investment than Pieridae Energy. However, Bank Mandiri Persero is 1.53 times less risky than Pieridae Energy. It trades about 0.03 of its potential returns per unit of risk. Pieridae Energy Limited is currently generating about -0.01 per unit of risk. If you would invest 34.00 in Bank Mandiri Persero on August 26, 2024 and sell it today you would earn a total of 5.00 from holding Bank Mandiri Persero or generate 14.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 88.32% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Pieridae Energy Limited
Performance |
| Timeline |
| Bank Mandiri Persero |
| Pieridae Energy |
Bank Mandiri and Pieridae Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Pieridae Energy
The main advantage of trading using opposite Bank Mandiri and Pieridae Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Pieridae Energy 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 Pieridae Energy will offset losses from the drop in Pieridae Energy's long position.| Bank Mandiri vs. Standard Bank Group | Bank Mandiri vs. PSB Holdings | Bank Mandiri vs. United Overseas Bank | Bank Mandiri vs. Turkiye Garanti Bankasi |
| Pieridae Energy vs. Southern Cross Media | Pieridae Energy vs. Prospera Energy | Pieridae Energy vs. Ngx Energy International | Pieridae Energy vs. ROK Resources |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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