Correlation Between BANK MANDIRI and First Quantum
Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI and First Quantum 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 First Quantum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK MANDIRI and First Quantum Minerals, you can compare the effects of market volatilities on BANK MANDIRI and First Quantum 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 First Quantum. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and First Quantum.
Diversification Opportunities for BANK MANDIRI and First Quantum
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BANK and First is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and First Quantum Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Quantum Minerals 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 First Quantum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Quantum Minerals has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and First Quantum go up and down completely randomly.
Pair Corralation between BANK MANDIRI and First Quantum
Assuming the 90 days trading horizon BANK MANDIRI is expected to generate 7.23 times less return on investment than First Quantum. But when comparing it to its historical volatility, BANK MANDIRI is 1.15 times less risky than First Quantum. It trades about 0.01 of its potential returns per unit of risk. First Quantum Minerals is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,321 in First Quantum Minerals on September 12, 2024 and sell it today you would earn a total of 38.00 from holding First Quantum Minerals or generate 2.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK MANDIRI vs. First Quantum Minerals
Performance |
| Timeline |
| BANK MANDIRI |
| First Quantum Minerals |
BANK MANDIRI and First Quantum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK MANDIRI and First Quantum
The main advantage of trading using opposite BANK MANDIRI and First Quantum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK MANDIRI position performs unexpectedly, First Quantum 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 First Quantum will offset losses from the drop in First Quantum's long position.| BANK MANDIRI vs. NURAN WIRELESS INC | BANK MANDIRI vs. Summit Hotel Properties | BANK MANDIRI vs. KENEDIX OFFICE INV | BANK MANDIRI vs. Pebblebrook Hotel Trust |
| First Quantum vs. Microbot Medical | First Quantum vs. CyberArk Software | First Quantum vs. AXWAY SOFTWARE EO | First Quantum vs. Luckin Coffee |
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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