Correlation Between Bank Mandiri and Croghan Bancshares
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Croghan Bancshares 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 Croghan Bancshares 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 Croghan Bancshares, you can compare the effects of market volatilities on Bank Mandiri and Croghan Bancshares 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 Croghan Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Croghan Bancshares.
Diversification Opportunities for Bank Mandiri and Croghan Bancshares
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Croghan is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Croghan Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Croghan Bancshares 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 Croghan Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Croghan Bancshares has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Croghan Bancshares go up and down completely randomly.
Pair Corralation between Bank Mandiri and Croghan Bancshares
Assuming the 90 days horizon Bank Mandiri is expected to generate 1.32 times less return on investment than Croghan Bancshares. In addition to that, Bank Mandiri is 1.5 times more volatile than Croghan Bancshares. It trades about 0.02 of its total potential returns per unit of risk. Croghan Bancshares is currently generating about 0.04 per unit of volatility. If you would invest 4,488 in Croghan Bancshares on September 3, 2024 and sell it today you would earn a total of 502.00 from holding Croghan Bancshares or generate 11.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 87.04% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Croghan Bancshares
Performance |
| Timeline |
| Bank Mandiri Persero |
| Croghan Bancshares |
Bank Mandiri and Croghan Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Croghan Bancshares
The main advantage of trading using opposite Bank Mandiri and Croghan Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Croghan Bancshares 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 Croghan Bancshares will offset losses from the drop in Croghan Bancshares' long position.| Bank Mandiri vs. Bank Rakyat | Bank Mandiri vs. Eurobank Ergasias Services | Bank Mandiri vs. Nedbank Group | Bank Mandiri vs. Standard Bank Group |
| Croghan Bancshares vs. PGE Corp | Croghan Bancshares vs. Empresa Distribuidora y | Croghan Bancshares vs. Artisan Partners Asset | Croghan Bancshares vs. WEC Energy 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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