Correlation Between Bank Mandiri and Sinopec Oilfield
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Sinopec Oilfield 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 Sinopec Oilfield 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 Sinopec Oilfield Service, you can compare the effects of market volatilities on Bank Mandiri and Sinopec Oilfield 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 Sinopec Oilfield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Sinopec Oilfield.
Diversification Opportunities for Bank Mandiri and Sinopec Oilfield
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Sinopec is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Sinopec Oilfield Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinopec Oilfield Service 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 Sinopec Oilfield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinopec Oilfield Service has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Sinopec Oilfield go up and down completely randomly.
Pair Corralation between Bank Mandiri and Sinopec Oilfield
Assuming the 90 days horizon Bank Mandiri Persero is expected to generate 2.34 times more return on investment than Sinopec Oilfield. However, Bank Mandiri is 2.34 times more volatile than Sinopec Oilfield Service. It trades about 0.06 of its potential returns per unit of risk. Sinopec Oilfield Service is currently generating about 0.02 per unit of risk. If you would invest 27.00 in Bank Mandiri Persero on September 4, 2024 and sell it today you would earn a total of 11.00 from holding Bank Mandiri Persero or generate 40.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.89% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Sinopec Oilfield Service
Performance |
| Timeline |
| Bank Mandiri Persero |
| Sinopec Oilfield Service |
Bank Mandiri and Sinopec Oilfield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Sinopec Oilfield
The main advantage of trading using opposite Bank Mandiri and Sinopec Oilfield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Sinopec Oilfield 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 Sinopec Oilfield will offset losses from the drop in Sinopec Oilfield'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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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