Correlation Between Bank Mandiri and NSTAR Electric
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and NSTAR Electric 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 NSTAR Electric 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 NSTAR Electric, you can compare the effects of market volatilities on Bank Mandiri and NSTAR Electric 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 NSTAR Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and NSTAR Electric.
Diversification Opportunities for Bank Mandiri and NSTAR Electric
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and NSTAR is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and NSTAR Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NSTAR Electric 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 NSTAR Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NSTAR Electric has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and NSTAR Electric go up and down completely randomly.
Pair Corralation between Bank Mandiri and NSTAR Electric
Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the NSTAR Electric. In addition to that, Bank Mandiri is 16.96 times more volatile than NSTAR Electric. It trades about -0.05 of its total potential returns per unit of risk. NSTAR Electric is currently generating about 0.22 per unit of volatility. If you would invest 8,350 in NSTAR Electric on September 13, 2024 and sell it today you would earn a total of 50.00 from holding NSTAR Electric or generate 0.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Mandiri Persero vs. NSTAR Electric
Performance |
| Timeline |
| Bank Mandiri Persero |
| NSTAR Electric |
Bank Mandiri and NSTAR Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and NSTAR Electric
The main advantage of trading using opposite Bank Mandiri and NSTAR Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, NSTAR Electric 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 NSTAR Electric will offset losses from the drop in NSTAR Electric's long position.| Bank Mandiri vs. Bank Rakyat | Bank Mandiri vs. Eurobank Ergasias Services | Bank Mandiri vs. Nedbank Group | Bank Mandiri vs. Standard Bank Group |
| NSTAR Electric vs. AMCON Distributing | NSTAR Electric vs. Marfrig Global Foods | NSTAR Electric vs. Vishay Precision Group | NSTAR Electric vs. Everspin Technologies |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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