Correlation Between BANK MANDIRI and Lundin Mining
Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI and Lundin Mining 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 Lundin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK MANDIRI and Lundin Mining, you can compare the effects of market volatilities on BANK MANDIRI and Lundin Mining 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 Lundin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and Lundin Mining.
Diversification Opportunities for BANK MANDIRI and Lundin Mining
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BANK and Lundin is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and Lundin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Mining 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 Lundin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lundin Mining has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and Lundin Mining go up and down completely randomly.
Pair Corralation between BANK MANDIRI and Lundin Mining
Assuming the 90 days trading horizon BANK MANDIRI is expected to generate 6.82 times less return on investment than Lundin Mining. But when comparing it to its historical volatility, BANK MANDIRI is 1.16 times less risky than Lundin Mining. It trades about 0.01 of its potential returns per unit of risk. Lundin Mining is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 836.00 in Lundin Mining on September 5, 2024 and sell it today you would earn a total of 109.00 from holding Lundin Mining or generate 13.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK MANDIRI vs. Lundin Mining
Performance |
| Timeline |
| BANK MANDIRI |
| Lundin Mining |
BANK MANDIRI and Lundin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK MANDIRI and Lundin Mining
The main advantage of trading using opposite BANK MANDIRI and Lundin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK MANDIRI position performs unexpectedly, Lundin Mining 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 Lundin Mining will offset losses from the drop in Lundin Mining's long position.| BANK MANDIRI vs. Electronic Arts | BANK MANDIRI vs. Gaztransport Technigaz SA | BANK MANDIRI vs. NTG Nordic Transport | BANK MANDIRI vs. Ming Le Sports |
| Lundin Mining vs. Superior Plus Corp | Lundin Mining vs. NMI Holdings | Lundin Mining vs. Origin Agritech | Lundin Mining vs. SIVERS SEMICONDUCTORS AB |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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