Correlation Between Bank Mandiri and Pinnacle Bancshares
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Pinnacle Bancshares 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 Pinnacle Bancshares 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 Pinnacle Bancshares, you can compare the effects of market volatilities on Bank Mandiri and Pinnacle Bancshares 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 Pinnacle Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Pinnacle Bancshares.
Diversification Opportunities for Bank Mandiri and Pinnacle Bancshares
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Pinnacle is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Pinnacle Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinnacle Bancshares 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 Pinnacle Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinnacle Bancshares has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Pinnacle Bancshares go up and down completely randomly.
Pair Corralation between Bank Mandiri and Pinnacle Bancshares
If you would invest 2,210 in Pinnacle Bancshares on November 2, 2024 and sell it today you would earn a total of 0.00 from holding Pinnacle Bancshares or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 2.44% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Pinnacle Bancshares
Performance |
| Timeline |
| Bank Mandiri Persero |
| Pinnacle Bancshares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank Mandiri and Pinnacle Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Pinnacle Bancshares
The main advantage of trading using opposite Bank Mandiri and Pinnacle Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Pinnacle Bancshares 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 Pinnacle Bancshares will offset losses from the drop in Pinnacle Bancshares' long position.| Bank Mandiri vs. Bank Rakyat | Bank Mandiri vs. Eurobank Ergasias Services | Bank Mandiri vs. Nedbank Group | Bank Mandiri vs. Standard Bank Group |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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