Correlation Between Bank Mandiri and Xinyi Glass
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Xinyi Glass 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 Xinyi Glass 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 Xinyi Glass Holdings, you can compare the effects of market volatilities on Bank Mandiri and Xinyi Glass 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 Xinyi Glass. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Xinyi Glass.
Diversification Opportunities for Bank Mandiri and Xinyi Glass
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Xinyi is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Xinyi Glass Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinyi Glass Holdings 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 Xinyi Glass. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinyi Glass Holdings has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Xinyi Glass go up and down completely randomly.
Pair Corralation between Bank Mandiri and Xinyi Glass
Assuming the 90 days horizon Bank Mandiri Persero is expected to generate 0.8 times more return on investment than Xinyi Glass. However, Bank Mandiri Persero is 1.24 times less risky than Xinyi Glass. It trades about -0.13 of its potential returns per unit of risk. Xinyi Glass Holdings is currently generating about -0.13 per unit of risk. If you would invest 1,668 in Bank Mandiri Persero on September 2, 2024 and sell it today you would lose (108.00) from holding Bank Mandiri Persero or give up 6.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Xinyi Glass Holdings
Performance |
| Timeline |
| Bank Mandiri Persero |
| Xinyi Glass Holdings |
Bank Mandiri and Xinyi Glass Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Xinyi Glass
The main advantage of trading using opposite Bank Mandiri and Xinyi Glass positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Xinyi Glass 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 Xinyi Glass will offset losses from the drop in Xinyi Glass' long position.| Bank Mandiri vs. Piraeus Bank SA | Bank Mandiri vs. Turkiye Garanti Bankasi | Bank Mandiri vs. Uwharrie Capital Corp |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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