Correlation Between BANK MANDIRI and EON SE
Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI and EON 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 EON 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 EON SE, you can compare the effects of market volatilities on BANK MANDIRI and EON 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 EON SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and EON SE.
Diversification Opportunities for BANK MANDIRI and EON SE
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BANK and EON is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and EON SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EON 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 EON SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EON SE has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and EON SE go up and down completely randomly.
Pair Corralation between BANK MANDIRI and EON SE
Assuming the 90 days trading horizon BANK MANDIRI is expected to generate 1.11 times more return on investment than EON SE. However, BANK MANDIRI is 1.11 times more volatile than EON SE. It trades about 0.02 of its potential returns per unit of risk. EON SE is currently generating about 0.01 per unit of risk. If you would invest 33.00 in BANK MANDIRI on September 4, 2024 and sell it today you would earn a total of 1.00 from holding BANK MANDIRI or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK MANDIRI vs. EON SE
Performance |
| Timeline |
| BANK MANDIRI |
| EON SE |
BANK MANDIRI and EON SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK MANDIRI and EON SE
The main advantage of trading using opposite BANK MANDIRI and EON SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK MANDIRI position performs unexpectedly, EON 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 EON SE will offset losses from the drop in EON SE's long position.| BANK MANDIRI vs. Seven West Media | BANK MANDIRI vs. CVS Health | BANK MANDIRI vs. Natural Health Trends | BANK MANDIRI vs. JD SPORTS FASH |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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