Correlation Between Bank Mandiri and Airtel Africa
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Airtel Africa 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 Airtel Africa 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 Airtel Africa Plc, you can compare the effects of market volatilities on Bank Mandiri and Airtel Africa 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 Airtel Africa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Airtel Africa.
Diversification Opportunities for Bank Mandiri and Airtel Africa
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Airtel is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Airtel Africa Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airtel Africa Plc 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 Airtel Africa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airtel Africa Plc has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Airtel Africa go up and down completely randomly.
Pair Corralation between Bank Mandiri and Airtel Africa
Assuming the 90 days horizon Bank Mandiri Persero is expected to generate 0.46 times more return on investment than Airtel Africa. However, Bank Mandiri Persero is 2.17 times less risky than Airtel Africa. It trades about 0.04 of its potential returns per unit of risk. Airtel Africa Plc is currently generating about 0.02 per unit of risk. If you would invest 1,290 in Bank Mandiri Persero on September 1, 2024 and sell it today you would earn a total of 321.00 from holding Bank Mandiri Persero or generate 24.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Airtel Africa Plc
Performance |
| Timeline |
| Bank Mandiri Persero |
| Airtel Africa Plc |
Bank Mandiri and Airtel Africa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Airtel Africa
The main advantage of trading using opposite Bank Mandiri and Airtel Africa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Airtel Africa 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 Airtel Africa will offset losses from the drop in Airtel Africa's long position.| Bank Mandiri vs. Piraeus Bank SA | Bank Mandiri vs. Turkiye Garanti Bankasi | Bank Mandiri vs. Delhi Bank Corp | Bank Mandiri vs. Uwharrie Capital Corp |
| Airtel Africa vs. BCE Inc | Airtel Africa vs. Axiologix | Airtel Africa vs. Advanced Info Service | Airtel Africa vs. American Nortel Communications |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |