Correlation Between Bank Mandiri and Century Financial
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Century 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 Century 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 Century Financial Corp, you can compare the effects of market volatilities on Bank Mandiri and Century 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 Century Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Century Financial.
Diversification Opportunities for Bank Mandiri and Century Financial
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Century is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Century Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century 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 Century Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Financial Corp has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Century Financial go up and down completely randomly.
Pair Corralation between Bank Mandiri and Century Financial
Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the Century Financial. In addition to that, Bank Mandiri is 1.02 times more volatile than Century Financial Corp. It trades about -0.11 of its total potential returns per unit of risk. Century Financial Corp is currently generating about 0.26 per unit of volatility. If you would invest 3,337 in Century Financial Corp on September 1, 2024 and sell it today you would earn a total of 413.00 from holding Century Financial Corp or generate 12.38% 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. Century Financial Corp
Performance |
| Timeline |
| Bank Mandiri Persero |
| Century Financial Corp |
Bank Mandiri and Century Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Century Financial
The main advantage of trading using opposite Bank Mandiri and Century Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Century 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 Century Financial will offset losses from the drop in Century 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 |
| Century Financial vs. Eastern Michigan Financial | Century Financial vs. Grand River Commerce | Century Financial vs. Bank of Botetourt | Century Financial vs. FNB Inc |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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