Correlation Between Bank Mandiri and FS Energy
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and FS Energy 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 FS Energy 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 FS Energy and, you can compare the effects of market volatilities on Bank Mandiri and FS Energy 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 FS Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and FS Energy.
Diversification Opportunities for Bank Mandiri and FS Energy
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and FSEN is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and FS Energy and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FS Energy 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 FS Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FS Energy has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and FS Energy go up and down completely randomly.
Pair Corralation between Bank Mandiri and FS Energy
Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the FS Energy. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Mandiri Persero is 5.89 times less risky than FS Energy. The pink sheet trades about -0.28 of its potential returns per unit of risk. The FS Energy and is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 250.00 in FS Energy and on August 28, 2024 and sell it today you would earn a total of 0.00 from holding FS Energy and or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Mandiri Persero vs. FS Energy and
Performance |
| Timeline |
| Bank Mandiri Persero |
| FS Energy |
Bank Mandiri and FS Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and FS Energy
The main advantage of trading using opposite Bank Mandiri and FS Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, FS Energy 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 FS Energy will offset losses from the drop in FS Energy's long position.The idea behind Bank Mandiri Persero and FS Energy and pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| FS Energy vs. Blackstone Group | FS Energy vs. BlackRock | FS Energy vs. Apollo Global Management | FS Energy vs. Bank of New |
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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