Correlation Between BANK MANDIRI and ORMAT TECHNOLOGIES
Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI and ORMAT TECHNOLOGIES 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 ORMAT TECHNOLOGIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK MANDIRI and ORMAT TECHNOLOGIES, you can compare the effects of market volatilities on BANK MANDIRI and ORMAT TECHNOLOGIES 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 ORMAT TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and ORMAT TECHNOLOGIES.
Diversification Opportunities for BANK MANDIRI and ORMAT TECHNOLOGIES
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BANK and ORMAT is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and ORMAT TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ORMAT TECHNOLOGIES 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 ORMAT TECHNOLOGIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ORMAT TECHNOLOGIES has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and ORMAT TECHNOLOGIES go up and down completely randomly.
Pair Corralation between BANK MANDIRI and ORMAT TECHNOLOGIES
Assuming the 90 days trading horizon BANK MANDIRI is expected to under-perform the ORMAT TECHNOLOGIES. In addition to that, BANK MANDIRI is 1.5 times more volatile than ORMAT TECHNOLOGIES. It trades about -0.17 of its total potential returns per unit of risk. ORMAT TECHNOLOGIES is currently generating about 0.06 per unit of volatility. If you would invest 7,488 in ORMAT TECHNOLOGIES on August 27, 2024 and sell it today you would earn a total of 122.00 from holding ORMAT TECHNOLOGIES or generate 1.63% 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. ORMAT TECHNOLOGIES
Performance |
| Timeline |
| BANK MANDIRI |
| ORMAT TECHNOLOGIES |
BANK MANDIRI and ORMAT TECHNOLOGIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK MANDIRI and ORMAT TECHNOLOGIES
The main advantage of trading using opposite BANK MANDIRI and ORMAT TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK MANDIRI position performs unexpectedly, ORMAT TECHNOLOGIES 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 ORMAT TECHNOLOGIES will offset losses from the drop in ORMAT TECHNOLOGIES's long position.| BANK MANDIRI vs. Richardson Electronics | BANK MANDIRI vs. ANTA SPORTS PRODUCT | BANK MANDIRI vs. Nucletron Electronic Aktiengesellschaft | BANK MANDIRI vs. Samsung Electronics Co |
| ORMAT TECHNOLOGIES vs. Apple Inc | ORMAT TECHNOLOGIES vs. Apple Inc | ORMAT TECHNOLOGIES vs. Apple Inc | ORMAT TECHNOLOGIES vs. Microsoft |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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