Correlation Between BANK MANDIRI and VP Bank
Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI and VP Bank 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 VP Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK MANDIRI and VP Bank AG, you can compare the effects of market volatilities on BANK MANDIRI and VP Bank 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 VP Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and VP Bank.
Diversification Opportunities for BANK MANDIRI and VP Bank
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BANK and 3VFN is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and VP Bank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VP Bank 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 VP Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VP Bank AG has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and VP Bank go up and down completely randomly.
Pair Corralation between BANK MANDIRI and VP Bank
Assuming the 90 days trading horizon BANK MANDIRI is expected to under-perform the VP Bank. In addition to that, BANK MANDIRI is 2.01 times more volatile than VP Bank AG. It trades about -0.16 of its total potential returns per unit of risk. VP Bank AG is currently generating about 0.33 per unit of volatility. If you would invest 7,350 in VP Bank AG on September 13, 2024 and sell it today you would earn a total of 800.00 from holding VP Bank AG or generate 10.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
BANK MANDIRI vs. VP Bank AG
Performance |
| Timeline |
| BANK MANDIRI |
| VP Bank AG |
BANK MANDIRI and VP Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK MANDIRI and VP Bank
The main advantage of trading using opposite BANK MANDIRI and VP Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK MANDIRI position performs unexpectedly, VP Bank 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 VP Bank will offset losses from the drop in VP Bank's long position.| BANK MANDIRI vs. Apple Inc | BANK MANDIRI vs. Apple Inc | BANK MANDIRI vs. Apple Inc | BANK MANDIRI vs. Apple Inc |
| VP Bank vs. Molson Coors Beverage | VP Bank vs. SCANSOURCE | VP Bank vs. Jacquet Metal Service | VP Bank vs. MCEWEN MINING INC |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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