Correlation Between BANK MANDIRI and CME
Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI and CME 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 CME into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK MANDIRI and CME Group, you can compare the effects of market volatilities on BANK MANDIRI and CME 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 CME. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and CME.
Diversification Opportunities for BANK MANDIRI and CME
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BANK and CME is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and CME Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CME Group 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 CME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CME Group has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and CME go up and down completely randomly.
Pair Corralation between BANK MANDIRI and CME
Assuming the 90 days trading horizon BANK MANDIRI is expected to under-perform the CME. In addition to that, BANK MANDIRI is 2.45 times more volatile than CME Group. It trades about -0.04 of its total potential returns per unit of risk. CME Group is currently generating about 0.28 per unit of volatility. If you would invest 20,949 in CME Group on September 12, 2024 and sell it today you would earn a total of 1,516 from holding CME Group or generate 7.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
BANK MANDIRI vs. CME Group
Performance |
| Timeline |
| BANK MANDIRI |
| CME Group |
BANK MANDIRI and CME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK MANDIRI and CME
The main advantage of trading using opposite BANK MANDIRI and CME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK MANDIRI position performs unexpectedly, CME 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 CME will offset losses from the drop in CME's long position.| BANK MANDIRI vs. Apple Inc | BANK MANDIRI vs. Apple Inc | BANK MANDIRI vs. Apple Inc | BANK MANDIRI vs. Apple 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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