Correlation Between Bank Mandiri and Dear Cashmere
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Dear Cashmere 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 Dear Cashmere 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 Dear Cashmere Holding, you can compare the effects of market volatilities on Bank Mandiri and Dear Cashmere 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 Dear Cashmere. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Dear Cashmere.
Diversification Opportunities for Bank Mandiri and Dear Cashmere
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Dear is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Dear Cashmere Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dear Cashmere Holding 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 Dear Cashmere. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dear Cashmere Holding has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Dear Cashmere go up and down completely randomly.
Pair Corralation between Bank Mandiri and Dear Cashmere
Assuming the 90 days horizon Bank Mandiri is expected to generate 49.98 times less return on investment than Dear Cashmere. But when comparing it to its historical volatility, Bank Mandiri Persero is 25.96 times less risky than Dear Cashmere. It trades about 0.03 of its potential returns per unit of risk. Dear Cashmere Holding is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Dear Cashmere Holding on August 24, 2024 and sell it today you would earn a total of 4.00 from holding Dear Cashmere Holding or generate 26.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Dear Cashmere Holding
Performance |
| Timeline |
| Bank Mandiri Persero |
| Dear Cashmere Holding |
Bank Mandiri and Dear Cashmere Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Dear Cashmere
The main advantage of trading using opposite Bank Mandiri and Dear Cashmere positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Dear Cashmere 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 Dear Cashmere will offset losses from the drop in Dear Cashmere'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 |
| Dear Cashmere vs. One World Universe | Dear Cashmere vs. All American Pet | Dear Cashmere vs. Ilustrato Pictures | Dear Cashmere vs. Quality Industrial Corp |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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