Correlation Between Bank Mandiri and Solvay Bank
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Solvay Bank 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 Solvay Bank 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 Solvay Bank Corp, you can compare the effects of market volatilities on Bank Mandiri and Solvay Bank 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 Solvay Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Solvay Bank.
Diversification Opportunities for Bank Mandiri and Solvay Bank
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Solvay is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Solvay Bank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solvay Bank 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 Solvay Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solvay Bank Corp has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Solvay Bank go up and down completely randomly.
Pair Corralation between Bank Mandiri and Solvay Bank
Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the Solvay Bank. In addition to that, Bank Mandiri is 2.07 times more volatile than Solvay Bank Corp. It trades about -0.11 of its total potential returns per unit of risk. Solvay Bank Corp is currently generating about -0.02 per unit of volatility. If you would invest 2,875 in Solvay Bank Corp on September 1, 2024 and sell it today you would lose (20.00) from holding Solvay Bank Corp or give up 0.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Solvay Bank Corp
Performance |
| Timeline |
| Bank Mandiri Persero |
| Solvay Bank Corp |
Bank Mandiri and Solvay Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Solvay Bank
The main advantage of trading using opposite Bank Mandiri and Solvay Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Solvay Bank 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 Solvay Bank will offset losses from the drop in Solvay Bank's long position.| Bank Mandiri vs. Piraeus Bank SA | Bank Mandiri vs. Turkiye Garanti Bankasi | Bank Mandiri vs. Delhi Bank Corp | Bank Mandiri vs. Uwharrie Capital Corp |
| Solvay Bank vs. Southern Michigan Bancorp | Solvay Bank vs. Summit Bancshares | Solvay Bank vs. Tri County Financial Group | Solvay Bank vs. QNB Corp |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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