Correlation Between BANK MANDIRI and IRPC Public
Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI and IRPC Public 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 IRPC Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK MANDIRI and IRPC Public, you can compare the effects of market volatilities on BANK MANDIRI and IRPC Public 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 IRPC Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and IRPC Public.
Diversification Opportunities for BANK MANDIRI and IRPC Public
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BANK and IRPC is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and IRPC Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IRPC Public 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 IRPC Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IRPC Public has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and IRPC Public go up and down completely randomly.
Pair Corralation between BANK MANDIRI and IRPC Public
Assuming the 90 days trading horizon BANK MANDIRI is expected to generate 3.57 times less return on investment than IRPC Public. But when comparing it to its historical volatility, BANK MANDIRI is 4.16 times less risky than IRPC Public. It trades about 0.02 of its potential returns per unit of risk. IRPC Public is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 5.02 in IRPC Public on October 22, 2024 and sell it today you would lose (2.22) from holding IRPC Public or give up 44.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
BANK MANDIRI vs. IRPC Public
Performance |
| Timeline |
| BANK MANDIRI |
| IRPC Public |
BANK MANDIRI and IRPC Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK MANDIRI and IRPC Public
The main advantage of trading using opposite BANK MANDIRI and IRPC Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK MANDIRI position performs unexpectedly, IRPC Public 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 IRPC Public will offset losses from the drop in IRPC Public's long position.| BANK MANDIRI vs. Scottish Mortgage Investment | BANK MANDIRI vs. GUARDANT HEALTH CL | BANK MANDIRI vs. Apollo Investment Corp | BANK MANDIRI vs. EPSILON HEALTHCARE LTD |
| IRPC Public vs. Reliance Industries Limited | IRPC Public vs. Superior Plus Corp | IRPC Public vs. Origin Agritech | IRPC Public vs. Identiv |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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