Correlation Between Bank Mandiri and Orkla ASA
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Orkla ASA 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 Orkla ASA 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 Orkla ASA ADR, you can compare the effects of market volatilities on Bank Mandiri and Orkla ASA 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 Orkla ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Orkla ASA.
Diversification Opportunities for Bank Mandiri and Orkla ASA
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Orkla is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Orkla ASA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orkla ASA 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 Orkla ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orkla ASA ADR has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Orkla ASA go up and down completely randomly.
Pair Corralation between Bank Mandiri and Orkla ASA
Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the Orkla ASA. In addition to that, Bank Mandiri is 1.71 times more volatile than Orkla ASA ADR. It trades about -0.1 of its total potential returns per unit of risk. Orkla ASA ADR is currently generating about 0.01 per unit of volatility. If you would invest 939.00 in Orkla ASA ADR on November 2, 2024 and sell it today you would earn a total of 0.00 from holding Orkla ASA ADR or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Orkla ASA ADR
Performance |
| Timeline |
| Bank Mandiri Persero |
| Orkla ASA ADR |
Bank Mandiri and Orkla ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Orkla ASA
The main advantage of trading using opposite Bank Mandiri and Orkla ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Orkla ASA 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 Orkla ASA will offset losses from the drop in Orkla ASA'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 |
| Orkla ASA vs. The A2 Milk | Orkla ASA vs. Altavoz Entertainment | Orkla ASA vs. Artisan Consumer Goods | Orkla ASA vs. Avi Ltd ADR |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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