Correlation Between Bank Mandiri and AXA SA
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and AXA SA 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 AXA SA 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 AXA SA, you can compare the effects of market volatilities on Bank Mandiri and AXA SA 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 AXA SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and AXA SA.
Diversification Opportunities for Bank Mandiri and AXA SA
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and AXA is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and AXA SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXA SA 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 AXA SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXA SA has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and AXA SA go up and down completely randomly.
Pair Corralation between Bank Mandiri and AXA SA
Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the AXA SA. In addition to that, Bank Mandiri is 1.35 times more volatile than AXA SA. It trades about -0.36 of its total potential returns per unit of risk. AXA SA is currently generating about -0.28 per unit of volatility. If you would invest 3,850 in AXA SA on August 24, 2024 and sell it today you would lose (299.00) from holding AXA SA or give up 7.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Mandiri Persero vs. AXA SA
Performance |
| Timeline |
| Bank Mandiri Persero |
| AXA SA |
Bank Mandiri and AXA SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and AXA SA
The main advantage of trading using opposite Bank Mandiri and AXA SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, AXA SA 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 AXA SA will offset losses from the drop in AXA SA's long position.| Bank Mandiri vs. Bank Rakyat | Bank Mandiri vs. Nedbank Group | Bank Mandiri vs. Standard Bank Group | Bank Mandiri vs. Bank Central Asia |
| AXA SA vs. Assicurazioni Generali SpA | AXA SA vs. Athene Holding | AXA SA vs. Athene Holding | AXA SA vs. Arch Capital Group |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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