Correlation Between Bank Mandiri and Shanghai Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Shanghai Pharmaceuticals 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 Shanghai Pharmaceuticals 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 Shanghai Pharmaceuticals Holding, you can compare the effects of market volatilities on Bank Mandiri and Shanghai Pharmaceuticals 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 Shanghai Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Shanghai Pharmaceuticals.
Diversification Opportunities for Bank Mandiri and Shanghai Pharmaceuticals
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Shanghai is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Shanghai Pharmaceuticals Holdi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Pharmaceuticals 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 Shanghai Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Pharmaceuticals has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Shanghai Pharmaceuticals go up and down completely randomly.
Pair Corralation between Bank Mandiri and Shanghai Pharmaceuticals
Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the Shanghai Pharmaceuticals. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Mandiri Persero is 1.48 times less risky than Shanghai Pharmaceuticals. The pink sheet trades about -0.13 of its potential returns per unit of risk. The Shanghai Pharmaceuticals Holding is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 819.00 in Shanghai Pharmaceuticals Holding on August 30, 2024 and sell it today you would earn a total of 1.00 from holding Shanghai Pharmaceuticals Holding or generate 0.12% 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. Shanghai Pharmaceuticals Holdi
Performance |
| Timeline |
| Bank Mandiri Persero |
| Shanghai Pharmaceuticals |
Bank Mandiri and Shanghai Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Shanghai Pharmaceuticals
The main advantage of trading using opposite Bank Mandiri and Shanghai Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Shanghai Pharmaceuticals 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 Shanghai Pharmaceuticals will offset losses from the drop in Shanghai Pharmaceuticals' long position.| Bank Mandiri vs. Bank Rakyat | Bank Mandiri vs. Eurobank Ergasias Services | Bank Mandiri vs. Nedbank Group | Bank Mandiri vs. Standard Bank Group |
| Shanghai Pharmaceuticals vs. McKesson | Shanghai Pharmaceuticals vs. SINOPHARM GROUP LTD | Shanghai Pharmaceuticals vs. Shanghai Pharmaceuticals Holding | Shanghai Pharmaceuticals vs. Shandong Weigao Group |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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