Correlation Between Bank Mandiri and Azimut Holding
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Azimut Holding 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 Azimut Holding 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 Azimut Holding SpA, you can compare the effects of market volatilities on Bank Mandiri and Azimut Holding 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 Azimut Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Azimut Holding.
Diversification Opportunities for Bank Mandiri and Azimut Holding
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Azimut is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Azimut Holding SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azimut Holding SpA 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 Azimut Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azimut Holding SpA has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Azimut Holding go up and down completely randomly.
Pair Corralation between Bank Mandiri and Azimut Holding
Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the Azimut Holding. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Mandiri Persero is 1.96 times less risky than Azimut Holding. The pink sheet trades about -0.28 of its potential returns per unit of risk. The Azimut Holding SpA is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 2,658 in Azimut Holding SpA on August 28, 2024 and sell it today you would lose (140.00) from holding Azimut Holding SpA or give up 5.27% 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. Azimut Holding SpA
Performance |
| Timeline |
| Bank Mandiri Persero |
| Azimut Holding SpA |
Bank Mandiri and Azimut Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Azimut Holding
The main advantage of trading using opposite Bank Mandiri and Azimut Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Azimut Holding 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 Azimut Holding will offset losses from the drop in Azimut Holding's long position.The idea behind Bank Mandiri Persero and Azimut Holding SpA 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.| Azimut Holding vs. Blackstone Group | Azimut Holding vs. BlackRock | Azimut Holding vs. Apollo Global Management | Azimut Holding vs. Bank of New |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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