Correlation Between BANK MANDIRI and TERUMO P
Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI and TERUMO P 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 TERUMO P into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK MANDIRI and TERUMO P, you can compare the effects of market volatilities on BANK MANDIRI and TERUMO P 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 TERUMO P. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and TERUMO P.
Diversification Opportunities for BANK MANDIRI and TERUMO P
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BANK and TERUMO is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and TERUMO P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TERUMO P 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 TERUMO P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TERUMO P has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and TERUMO P go up and down completely randomly.
Pair Corralation between BANK MANDIRI and TERUMO P
Assuming the 90 days trading horizon BANK MANDIRI is expected to generate 1.65 times more return on investment than TERUMO P. However, BANK MANDIRI is 1.65 times more volatile than TERUMO P. It trades about 0.12 of its potential returns per unit of risk. TERUMO P is currently generating about -0.01 per unit of risk. If you would invest 21.00 in BANK MANDIRI on January 17, 2025 and sell it today you would earn a total of 2.00 from holding BANK MANDIRI or generate 9.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
BANK MANDIRI vs. TERUMO P
Performance |
| Timeline |
| BANK MANDIRI |
| TERUMO P |
BANK MANDIRI and TERUMO P Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK MANDIRI and TERUMO P
The main advantage of trading using opposite BANK MANDIRI and TERUMO P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK MANDIRI position performs unexpectedly, TERUMO P 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 TERUMO P will offset losses from the drop in TERUMO P's long position.| BANK MANDIRI vs. EAT WELL INVESTMENT | BANK MANDIRI vs. Indutrade AB | BANK MANDIRI vs. Sun Art Retail | BANK MANDIRI vs. Yunnan Water Investment |
| TERUMO P vs. Medical Properties Trust | TERUMO P vs. Fresenius Medical Care | TERUMO P vs. Lamar Advertising | TERUMO P vs. Advanced Medical Solutions |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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