Correlation Between Bank Mandiri and Schibsted ASA
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Schibsted ASA 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 Schibsted ASA 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 Schibsted ASA ADR, you can compare the effects of market volatilities on Bank Mandiri and Schibsted ASA 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 Schibsted ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Schibsted ASA.
Diversification Opportunities for Bank Mandiri and Schibsted ASA
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Schibsted is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Schibsted ASA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schibsted ASA ADR 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 Schibsted ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schibsted ASA ADR has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Schibsted ASA go up and down completely randomly.
Pair Corralation between Bank Mandiri and Schibsted ASA
Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the Schibsted ASA. In addition to that, Bank Mandiri is 2.56 times more volatile than Schibsted ASA ADR. It trades about -0.12 of its total potential returns per unit of risk. Schibsted ASA ADR is currently generating about -0.09 per unit of volatility. If you would invest 3,093 in Schibsted ASA ADR on December 1, 2024 and sell it today you would lose (242.00) from holding Schibsted ASA ADR or give up 7.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Schibsted ASA ADR
Performance |
| Timeline |
| Bank Mandiri Persero |
| Schibsted ASA ADR |
Bank Mandiri and Schibsted ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Schibsted ASA
The main advantage of trading using opposite Bank Mandiri and Schibsted ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Schibsted ASA 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 Schibsted ASA will offset losses from the drop in Schibsted ASA'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 |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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