Correlation Between Bank Mandiri and DIAGNOS
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and DIAGNOS 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 DIAGNOS 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 DIAGNOS, you can compare the effects of market volatilities on Bank Mandiri and DIAGNOS 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 DIAGNOS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and DIAGNOS.
Diversification Opportunities for Bank Mandiri and DIAGNOS
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and DIAGNOS is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and DIAGNOS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIAGNOS 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 DIAGNOS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIAGNOS has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and DIAGNOS go up and down completely randomly.
Pair Corralation between Bank Mandiri and DIAGNOS
Assuming the 90 days horizon Bank Mandiri is expected to generate 2.91 times less return on investment than DIAGNOS. But when comparing it to its historical volatility, Bank Mandiri Persero is 3.15 times less risky than DIAGNOS. It trades about 0.03 of its potential returns per unit of risk. DIAGNOS is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 22.00 in DIAGNOS on October 7, 2024 and sell it today you would lose (1.00) from holding DIAGNOS or give up 4.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Mandiri Persero vs. DIAGNOS
Performance |
| Timeline |
| Bank Mandiri Persero |
| DIAGNOS |
Bank Mandiri and DIAGNOS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and DIAGNOS
The main advantage of trading using opposite Bank Mandiri and DIAGNOS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, DIAGNOS 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 DIAGNOS will offset losses from the drop in DIAGNOS's long position.| Bank Mandiri vs. Bank Rakyat | Bank Mandiri vs. Eurobank Ergasias Services | Bank Mandiri vs. Nedbank Group | Bank Mandiri vs. Standard Bank Group |
| DIAGNOS vs. Cogstate Limited | DIAGNOS vs. Cognetivity Neurosciences | DIAGNOS vs. CareMax | DIAGNOS vs. Mednow 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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