Correlation Between BANK MANDIRI and Grenke AG
Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI and Grenke AG 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 Grenke AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK MANDIRI and Grenke AG, you can compare the effects of market volatilities on BANK MANDIRI and Grenke AG 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 Grenke AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and Grenke AG.
Diversification Opportunities for BANK MANDIRI and Grenke AG
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BANK and Grenke is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and Grenke AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grenke AG 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 Grenke AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grenke AG has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and Grenke AG go up and down completely randomly.
Pair Corralation between BANK MANDIRI and Grenke AG
Assuming the 90 days trading horizon BANK MANDIRI is expected to generate 1.04 times more return on investment than Grenke AG. However, BANK MANDIRI is 1.04 times more volatile than Grenke AG. It trades about -0.05 of its potential returns per unit of risk. Grenke AG is currently generating about -0.2 per unit of risk. If you would invest 36.00 in BANK MANDIRI on September 13, 2024 and sell it today you would lose (1.00) from holding BANK MANDIRI or give up 2.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
BANK MANDIRI vs. Grenke AG
Performance |
| Timeline |
| BANK MANDIRI |
| Grenke AG |
BANK MANDIRI and Grenke AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK MANDIRI and Grenke AG
The main advantage of trading using opposite BANK MANDIRI and Grenke AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK MANDIRI position performs unexpectedly, Grenke AG 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 Grenke AG will offset losses from the drop in Grenke AG's long position.| BANK MANDIRI vs. ARISTOCRAT LEISURE | BANK MANDIRI vs. Columbia Sportswear | BANK MANDIRI vs. Lamar Advertising | BANK MANDIRI vs. PACIFIC ONLINE |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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