Correlation Between Bank Mandiri and Geberit AG
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Geberit AG 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 Geberit AG 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 Geberit AG ADR, you can compare the effects of market volatilities on Bank Mandiri and Geberit AG 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 Geberit AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Geberit AG.
Diversification Opportunities for Bank Mandiri and Geberit AG
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Geberit is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Geberit AG ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geberit AG ADR 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 Geberit AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geberit AG ADR has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Geberit AG go up and down completely randomly.
Pair Corralation between Bank Mandiri and Geberit AG
Assuming the 90 days horizon Bank Mandiri Persero is expected to generate 1.59 times more return on investment than Geberit AG. However, Bank Mandiri is 1.59 times more volatile than Geberit AG ADR. It trades about 0.04 of its potential returns per unit of risk. Geberit AG ADR is currently generating about -0.01 per unit of risk. If you would invest 1,488 in Bank Mandiri Persero on September 1, 2024 and sell it today you would earn a total of 123.00 from holding Bank Mandiri Persero or generate 8.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Geberit AG ADR
Performance |
| Timeline |
| Bank Mandiri Persero |
| Geberit AG ADR |
Bank Mandiri and Geberit AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Geberit AG
The main advantage of trading using opposite Bank Mandiri and Geberit AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Geberit AG 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 Geberit AG will offset losses from the drop in Geberit AG'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 |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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