Correlation Between Bank Mandiri and Swedbank
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Swedbank 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 Swedbank 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 Swedbank AB, you can compare the effects of market volatilities on Bank Mandiri and Swedbank 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 Swedbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Swedbank.
Diversification Opportunities for Bank Mandiri and Swedbank
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Swedbank is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Swedbank AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swedbank AB 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 Swedbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swedbank AB has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Swedbank go up and down completely randomly.
Pair Corralation between Bank Mandiri and Swedbank
Assuming the 90 days horizon Bank Mandiri Persero is expected to generate 1.01 times more return on investment than Swedbank. However, Bank Mandiri is 1.01 times more volatile than Swedbank AB. It trades about 0.04 of its potential returns per unit of risk. Swedbank AB is currently generating about 0.04 per unit of risk. If you would invest 1,210 in Bank Mandiri Persero on August 30, 2024 and sell it today you would earn a total of 440.00 from holding Bank Mandiri Persero or generate 36.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Swedbank AB
Performance |
| Timeline |
| Bank Mandiri Persero |
| Swedbank AB |
Bank Mandiri and Swedbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Swedbank
The main advantage of trading using opposite Bank Mandiri and Swedbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Swedbank 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 Swedbank will offset losses from the drop in Swedbank's long position.| Bank Mandiri vs. Israel Discount Bank | Bank Mandiri vs. Baraboo Bancorporation | Bank Mandiri vs. Danske Bank AS | Bank Mandiri vs. Jyske Bank AS |
| Swedbank vs. United Overseas Bank | Swedbank vs. KBC Groep NV | Swedbank vs. Jyske Bank AS | Swedbank vs. Israel Discount Bank |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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