Correlation Between BANK MANDIRI and ASX
Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI and ASX 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 ASX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK MANDIRI and ASX Limited, you can compare the effects of market volatilities on BANK MANDIRI and ASX 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 ASX. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and ASX.
Diversification Opportunities for BANK MANDIRI and ASX
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BANK and ASX is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and ASX Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASX Limited 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 ASX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASX Limited has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and ASX go up and down completely randomly.
Pair Corralation between BANK MANDIRI and ASX
Assuming the 90 days trading horizon BANK MANDIRI is expected to generate 1.08 times less return on investment than ASX. In addition to that, BANK MANDIRI is 1.91 times more volatile than ASX Limited. It trades about 0.02 of its total potential returns per unit of risk. ASX Limited is currently generating about 0.05 per unit of volatility. If you would invest 3,558 in ASX Limited on September 14, 2024 and sell it today you would earn a total of 502.00 from holding ASX Limited or generate 14.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
BANK MANDIRI vs. ASX Limited
Performance |
| Timeline |
| BANK MANDIRI |
| ASX Limited |
BANK MANDIRI and ASX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK MANDIRI and ASX
The main advantage of trading using opposite BANK MANDIRI and ASX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK MANDIRI position performs unexpectedly, ASX 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 ASX will offset losses from the drop in ASX's long position.| BANK MANDIRI vs. Tower One Wireless | BANK MANDIRI vs. Fukuyama Transporting Co | BANK MANDIRI vs. KENEDIX OFFICE INV | BANK MANDIRI vs. NURAN WIRELESS INC |
| ASX vs. CME Group | ASX vs. Intercontinental Exchange | ASX vs. Hong Kong Exchanges | ASX vs. London Stock Exchange |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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