Correlation Between BANK MANDIRI and Airbus SE
Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI and Airbus SE 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 Airbus SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK MANDIRI and Airbus SE, you can compare the effects of market volatilities on BANK MANDIRI and Airbus SE 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 Airbus SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and Airbus SE.
Diversification Opportunities for BANK MANDIRI and Airbus SE
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BANK and Airbus is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and Airbus SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airbus SE 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 Airbus SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airbus SE has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and Airbus SE go up and down completely randomly.
Pair Corralation between BANK MANDIRI and Airbus SE
Assuming the 90 days trading horizon BANK MANDIRI is expected to under-perform the Airbus SE. In addition to that, BANK MANDIRI is 1.74 times more volatile than Airbus SE. It trades about -0.12 of its total potential returns per unit of risk. Airbus SE is currently generating about -0.01 per unit of volatility. If you would invest 13,914 in Airbus SE on August 27, 2024 and sell it today you would lose (84.00) from holding Airbus SE or give up 0.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK MANDIRI vs. Airbus SE
Performance |
| Timeline |
| BANK MANDIRI |
| Airbus SE |
BANK MANDIRI and Airbus SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK MANDIRI and Airbus SE
The main advantage of trading using opposite BANK MANDIRI and Airbus SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK MANDIRI position performs unexpectedly, Airbus SE 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 Airbus SE will offset losses from the drop in Airbus SE's long position.| BANK MANDIRI vs. Apple Inc | BANK MANDIRI vs. Apple Inc | BANK MANDIRI vs. Apple Inc | BANK MANDIRI vs. Microsoft |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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