Correlation Between BANK MANDIRI and Barrick Gold
Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI and Barrick Gold 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 Barrick Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK MANDIRI and Barrick Gold, you can compare the effects of market volatilities on BANK MANDIRI and Barrick Gold 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 Barrick Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and Barrick Gold.
Diversification Opportunities for BANK MANDIRI and Barrick Gold
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BANK and Barrick is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and Barrick Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barrick Gold 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 are associated (or correlated) with Barrick Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barrick Gold has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and Barrick Gold go up and down completely randomly.
Pair Corralation between BANK MANDIRI and Barrick Gold
Assuming the 90 days trading horizon BANK MANDIRI is expected to generate 1.17 times more return on investment than Barrick Gold. However, BANK MANDIRI is 1.17 times more volatile than Barrick Gold. It trades about 0.03 of its potential returns per unit of risk. Barrick Gold is currently generating about 0.02 per unit of risk. If you would invest 29.00 in BANK MANDIRI on August 31, 2024 and sell it today you would earn a total of 7.00 from holding BANK MANDIRI or generate 24.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK MANDIRI vs. Barrick Gold
Performance |
| Timeline |
| BANK MANDIRI |
| Barrick Gold |
BANK MANDIRI and Barrick Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK MANDIRI and Barrick Gold
The main advantage of trading using opposite BANK MANDIRI and Barrick Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK MANDIRI position performs unexpectedly, Barrick Gold 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 Barrick Gold will offset losses from the drop in Barrick Gold's long position.| BANK MANDIRI vs. GRUPO CARSO A1 | BANK MANDIRI vs. SBA Communications Corp | BANK MANDIRI vs. Singapore Telecommunications Limited | BANK MANDIRI vs. Liberty Broadband |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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