Correlation Between Bank Mandiri and Traws Pharma
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Traws Pharma 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 Traws Pharma 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 Traws Pharma, you can compare the effects of market volatilities on Bank Mandiri and Traws Pharma 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 Traws Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Traws Pharma.
Diversification Opportunities for Bank Mandiri and Traws Pharma
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Traws is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Traws Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Traws Pharma 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 Traws Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Traws Pharma has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Traws Pharma go up and down completely randomly.
Pair Corralation between Bank Mandiri and Traws Pharma
Assuming the 90 days horizon Bank Mandiri Persero is expected to generate 0.74 times more return on investment than Traws Pharma. However, Bank Mandiri Persero is 1.36 times less risky than Traws Pharma. It trades about -0.07 of its potential returns per unit of risk. Traws Pharma is currently generating about -0.12 per unit of risk. If you would invest 36.00 in Bank Mandiri Persero on November 3, 2024 and sell it today you would lose (3.00) from holding Bank Mandiri Persero or give up 8.33% 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. Traws Pharma
Performance |
| Timeline |
| Bank Mandiri Persero |
| Traws Pharma |
Bank Mandiri and Traws Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Traws Pharma
The main advantage of trading using opposite Bank Mandiri and Traws Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Traws Pharma 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 Traws Pharma will offset losses from the drop in Traws Pharma'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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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