Correlation Between Bank Mandiri and CLP Holdings
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and CLP Holdings 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 CLP Holdings 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 CLP Holdings, you can compare the effects of market volatilities on Bank Mandiri and CLP Holdings 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 CLP Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and CLP Holdings.
Diversification Opportunities for Bank Mandiri and CLP Holdings
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and CLP is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and CLP Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLP Holdings 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 CLP Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CLP Holdings has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and CLP Holdings go up and down completely randomly.
Pair Corralation between Bank Mandiri and CLP Holdings
Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the CLP Holdings. In addition to that, Bank Mandiri is 3.18 times more volatile than CLP Holdings. It trades about -0.11 of its total potential returns per unit of risk. CLP Holdings is currently generating about 0.0 per unit of volatility. If you would invest 844.00 in CLP Holdings on September 1, 2024 and sell it today you would earn a total of 0.00 from holding CLP Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Mandiri Persero vs. CLP Holdings
Performance |
| Timeline |
| Bank Mandiri Persero |
| CLP Holdings |
Bank Mandiri and CLP Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and CLP Holdings
The main advantage of trading using opposite Bank Mandiri and CLP Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, CLP Holdings 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 CLP Holdings will offset losses from the drop in CLP Holdings' 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 |
| CLP Holdings vs. Southern Company | CLP Holdings vs. Duke Energy | CLP Holdings vs. Duke Energy | CLP Holdings vs. National Grid PLC |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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