Correlation Between Bank Mandiri and InPlay Oil
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and InPlay Oil 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 InPlay Oil 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 InPlay Oil Corp, you can compare the effects of market volatilities on Bank Mandiri and InPlay Oil 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 InPlay Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and InPlay Oil.
Diversification Opportunities for Bank Mandiri and InPlay Oil
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and InPlay is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and InPlay Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InPlay Oil Corp 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 InPlay Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InPlay Oil Corp has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and InPlay Oil go up and down completely randomly.
Pair Corralation between Bank Mandiri and InPlay Oil
Assuming the 90 days horizon Bank Mandiri Persero is expected to generate 0.88 times more return on investment than InPlay Oil. However, Bank Mandiri Persero is 1.14 times less risky than InPlay Oil. It trades about -0.11 of its potential returns per unit of risk. InPlay Oil Corp is currently generating about -0.11 per unit of risk. If you would invest 1,820 in Bank Mandiri Persero on August 29, 2024 and sell it today you would lose (170.00) from holding Bank Mandiri Persero or give up 9.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Bank Mandiri Persero vs. InPlay Oil Corp
Performance |
| Timeline |
| Bank Mandiri Persero |
| InPlay Oil Corp |
Bank Mandiri and InPlay Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and InPlay Oil
The main advantage of trading using opposite Bank Mandiri and InPlay Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, InPlay Oil 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 InPlay Oil will offset losses from the drop in InPlay Oil's long position.| Bank Mandiri vs. Israel Discount Bank | Bank Mandiri vs. Baraboo Bancorporation | Bank Mandiri vs. Danske Bank AS | Bank Mandiri vs. Jyske Bank AS |
| InPlay Oil vs. Yamaha Motor Co | InPlay Oil vs. Nitto Denko Corp | InPlay Oil vs. Farmers Merchants Bancorp | InPlay Oil vs. Furukawa Electric Co |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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