Correlation Between Bank Mandiri and Churchill Downs
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Churchill Downs 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 Churchill Downs 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 Churchill Downs Incorporated, you can compare the effects of market volatilities on Bank Mandiri and Churchill Downs 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 Churchill Downs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Churchill Downs.
Diversification Opportunities for Bank Mandiri and Churchill Downs
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and Churchill is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Churchill Downs Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Churchill Downs 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 Churchill Downs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Churchill Downs has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Churchill Downs go up and down completely randomly.
Pair Corralation between Bank Mandiri and Churchill Downs
Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the Churchill Downs. In addition to that, Bank Mandiri is 2.56 times more volatile than Churchill Downs Incorporated. It trades about -0.33 of its total potential returns per unit of risk. Churchill Downs Incorporated is currently generating about -0.34 per unit of volatility. If you would invest 12,517 in Churchill Downs Incorporated on November 28, 2024 and sell it today you would lose (1,047) from holding Churchill Downs Incorporated or give up 8.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Churchill Downs Incorporated
Performance |
| Timeline |
| Bank Mandiri Persero |
| Churchill Downs |
Bank Mandiri and Churchill Downs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Churchill Downs
The main advantage of trading using opposite Bank Mandiri and Churchill Downs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Churchill Downs 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 Churchill Downs will offset losses from the drop in Churchill Downs' long position.| Bank Mandiri vs. Bank Rakyat | Bank Mandiri vs. Eurobank Ergasias Services | Bank Mandiri vs. Nedbank Group | Bank Mandiri vs. Standard Bank Group |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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