Correlation Between Bank Mandiri and First Ottawa
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and First Ottawa 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 First Ottawa 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 First Ottawa Bancshares, you can compare the effects of market volatilities on Bank Mandiri and First Ottawa 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 First Ottawa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and First Ottawa.
Diversification Opportunities for Bank Mandiri and First Ottawa
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and First is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and First Ottawa Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Ottawa Bancshares 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 First Ottawa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Ottawa Bancshares has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and First Ottawa go up and down completely randomly.
Pair Corralation between Bank Mandiri and First Ottawa
Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the First Ottawa. In addition to that, Bank Mandiri is 1.68 times more volatile than First Ottawa Bancshares. It trades about -0.02 of its total potential returns per unit of risk. First Ottawa Bancshares is currently generating about 0.11 per unit of volatility. If you would invest 9,910 in First Ottawa Bancshares on September 1, 2024 and sell it today you would earn a total of 2,091 from holding First Ottawa Bancshares or generate 21.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 83.51% |
| Values | Daily Returns |
Bank Mandiri Persero vs. First Ottawa Bancshares
Performance |
| Timeline |
| Bank Mandiri Persero |
| First Ottawa Bancshares |
Bank Mandiri and First Ottawa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and First Ottawa
The main advantage of trading using opposite Bank Mandiri and First Ottawa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, First Ottawa 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 First Ottawa will offset losses from the drop in First Ottawa'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 |
| First Ottawa vs. Century Next Financial | First Ottawa vs. Citizens Financial Corp | First Ottawa vs. Triad Business Bank | First Ottawa vs. First Bankers Trustshares |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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