Correlation Between Bank Mandiri and Coastal Financial
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Coastal Financial 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 Coastal Financial 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 Coastal Financial Corp, you can compare the effects of market volatilities on Bank Mandiri and Coastal Financial 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 Coastal Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Coastal Financial.
Diversification Opportunities for Bank Mandiri and Coastal Financial
-0.92 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Coastal is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Coastal Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coastal Financial Corp 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 Coastal Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coastal Financial Corp has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Coastal Financial go up and down completely randomly.
Pair Corralation between Bank Mandiri and Coastal Financial
Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the Coastal Financial. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Mandiri Persero is 1.12 times less risky than Coastal Financial. The pink sheet trades about -0.11 of its potential returns per unit of risk. The Coastal Financial Corp is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 6,299 in Coastal Financial Corp on September 1, 2024 and sell it today you would earn a total of 1,356 from holding Coastal Financial Corp or generate 21.53% 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. Coastal Financial Corp
Performance |
| Timeline |
| Bank Mandiri Persero |
| Coastal Financial Corp |
Bank Mandiri and Coastal Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Coastal Financial
The main advantage of trading using opposite Bank Mandiri and Coastal Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Coastal Financial 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 Coastal Financial will offset losses from the drop in Coastal Financial'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 |
| Coastal Financial vs. Affinity Bancshares | Coastal Financial vs. Home Federal Bancorp | Coastal Financial vs. First Business Financial | Coastal Financial vs. Old Point Financial |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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