Correlation Between BANK MANDIRI and Inmobiliaria Colonial
Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI and Inmobiliaria Colonial 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 Inmobiliaria Colonial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK MANDIRI and Inmobiliaria Colonial SOCIMI, you can compare the effects of market volatilities on BANK MANDIRI and Inmobiliaria Colonial 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 Inmobiliaria Colonial. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and Inmobiliaria Colonial.
Diversification Opportunities for BANK MANDIRI and Inmobiliaria Colonial
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BANK and Inmobiliaria is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and Inmobiliaria Colonial SOCIMI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inmobiliaria Colonial 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 Inmobiliaria Colonial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inmobiliaria Colonial has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and Inmobiliaria Colonial go up and down completely randomly.
Pair Corralation between BANK MANDIRI and Inmobiliaria Colonial
Assuming the 90 days trading horizon BANK MANDIRI is expected to generate 2.31 times more return on investment than Inmobiliaria Colonial. However, BANK MANDIRI is 2.31 times more volatile than Inmobiliaria Colonial SOCIMI. It trades about 0.03 of its potential returns per unit of risk. Inmobiliaria Colonial SOCIMI is currently generating about 0.01 per unit of risk. If you would invest 28.00 in BANK MANDIRI on September 2, 2024 and sell it today you would earn a total of 5.00 from holding BANK MANDIRI or generate 17.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK MANDIRI vs. Inmobiliaria Colonial SOCIMI
Performance |
| Timeline |
| BANK MANDIRI |
| Inmobiliaria Colonial |
BANK MANDIRI and Inmobiliaria Colonial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK MANDIRI and Inmobiliaria Colonial
The main advantage of trading using opposite BANK MANDIRI and Inmobiliaria Colonial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK MANDIRI position performs unexpectedly, Inmobiliaria Colonial 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 Inmobiliaria Colonial will offset losses from the drop in Inmobiliaria Colonial's long position.| BANK MANDIRI vs. SIVERS SEMICONDUCTORS AB | BANK MANDIRI vs. Darden Restaurants | BANK MANDIRI vs. Reliance Steel Aluminum | BANK MANDIRI vs. Q2M Managementberatung AG |
| Inmobiliaria Colonial vs. Superior Plus Corp | Inmobiliaria Colonial vs. NMI Holdings | Inmobiliaria Colonial vs. Origin Agritech | Inmobiliaria Colonial 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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