Correlation Between Bank Mandiri and Canaan
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Canaan 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 Canaan 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 Canaan Inc, you can compare the effects of market volatilities on Bank Mandiri and Canaan 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 Canaan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Canaan.
Diversification Opportunities for Bank Mandiri and Canaan
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Canaan is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Canaan Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canaan Inc 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 Canaan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canaan Inc has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Canaan go up and down completely randomly.
Pair Corralation between Bank Mandiri and Canaan
Assuming the 90 days horizon Bank Mandiri is expected to generate 4.21 times less return on investment than Canaan. But when comparing it to its historical volatility, Bank Mandiri Persero is 4.22 times less risky than Canaan. It trades about 0.02 of its potential returns per unit of risk. Canaan Inc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 265.00 in Canaan Inc on August 24, 2024 and sell it today you would lose (68.00) from holding Canaan Inc or give up 25.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Canaan Inc
Performance |
| Timeline |
| Bank Mandiri Persero |
| Canaan Inc |
Bank Mandiri and Canaan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Canaan
The main advantage of trading using opposite Bank Mandiri and Canaan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Canaan 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 Canaan will offset losses from the drop in Canaan's long position.| Bank Mandiri vs. Nedbank Group | Bank Mandiri vs. Standard Bank Group | Bank Mandiri vs. Bank Central Asia | Bank Mandiri vs. PSB Holdings |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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