Correlation Between Bank Mandiri and Ashmore Group
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Ashmore Group 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 Ashmore Group 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 Ashmore Group Plc, you can compare the effects of market volatilities on Bank Mandiri and Ashmore Group 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 Ashmore Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Ashmore Group.
Diversification Opportunities for Bank Mandiri and Ashmore Group
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Ashmore is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Ashmore Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashmore Group 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 Ashmore Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashmore Group Plc has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Ashmore Group go up and down completely randomly.
Pair Corralation between Bank Mandiri and Ashmore Group
Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the Ashmore Group. In addition to that, Bank Mandiri is 1.32 times more volatile than Ashmore Group Plc. It trades about -0.28 of its total potential returns per unit of risk. Ashmore Group Plc is currently generating about 0.22 per unit of volatility. If you would invest 254.00 in Ashmore Group Plc on August 28, 2024 and sell it today you would earn a total of 16.00 from holding Ashmore Group Plc or generate 6.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Ashmore Group Plc
Performance |
| Timeline |
| Bank Mandiri Persero |
| Ashmore Group Plc |
Bank Mandiri and Ashmore Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Ashmore Group
The main advantage of trading using opposite Bank Mandiri and Ashmore Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Ashmore Group 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 Ashmore Group will offset losses from the drop in Ashmore Group's long position.The idea behind Bank Mandiri Persero and Ashmore Group Plc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Ashmore Group vs. Morgan Stanley China | Ashmore Group vs. Central Europe Russia | Ashmore Group vs. Morgan Stanley India | Ashmore Group vs. Nuveen Missouri Quality |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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