Correlation Between Bank Mandiri and Dril Quip
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Dril Quip 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 Dril Quip 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 Dril Quip, you can compare the effects of market volatilities on Bank Mandiri and Dril Quip 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 Dril Quip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Dril Quip.
Diversification Opportunities for Bank Mandiri and Dril Quip
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Dril is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Dril Quip in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dril Quip 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 Dril Quip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dril Quip has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Dril Quip go up and down completely randomly.
Pair Corralation between Bank Mandiri and Dril Quip
Assuming the 90 days horizon Bank Mandiri Persero is expected to generate 0.74 times more return on investment than Dril Quip. However, Bank Mandiri Persero is 1.35 times less risky than Dril Quip. It trades about 0.03 of its potential returns per unit of risk. Dril Quip is currently generating about -0.02 per unit of risk. If you would invest 1,488 in Bank Mandiri Persero on September 2, 2024 and sell it today you would earn a total of 72.00 from holding Bank Mandiri Persero or generate 4.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 53.97% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Dril Quip
Performance |
| Timeline |
| Bank Mandiri Persero |
| Dril Quip |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Bank Mandiri and Dril Quip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Dril Quip
The main advantage of trading using opposite Bank Mandiri and Dril Quip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Dril Quip 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 Dril Quip will offset losses from the drop in Dril Quip's long position.| Bank Mandiri vs. Piraeus Bank SA | Bank Mandiri vs. Turkiye Garanti Bankasi | Bank Mandiri vs. Uwharrie Capital Corp |
| Dril Quip vs. MRC Global | Dril Quip vs. NOV Inc | Dril Quip vs. Ranger Energy Services | Dril Quip vs. Helix Energy Solutions |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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