Correlation Between BANK MANDIRI and Element Solutions
Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI and Element Solutions 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 Element Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK MANDIRI and Element Solutions, you can compare the effects of market volatilities on BANK MANDIRI and Element Solutions 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 Element Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and Element Solutions.
Diversification Opportunities for BANK MANDIRI and Element Solutions
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BANK and Element is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and Element Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Element Solutions 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 Element Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Element Solutions has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and Element Solutions go up and down completely randomly.
Pair Corralation between BANK MANDIRI and Element Solutions
Assuming the 90 days trading horizon BANK MANDIRI is expected to under-perform the Element Solutions. In addition to that, BANK MANDIRI is 1.53 times more volatile than Element Solutions. It trades about -0.03 of its total potential returns per unit of risk. Element Solutions is currently generating about 0.04 per unit of volatility. If you would invest 2,238 in Element Solutions on September 20, 2024 and sell it today you would earn a total of 302.00 from holding Element Solutions or generate 13.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.48% |
| Values | Daily Returns |
BANK MANDIRI vs. Element Solutions
Performance |
| Timeline |
| BANK MANDIRI |
| Element Solutions |
BANK MANDIRI and Element Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK MANDIRI and Element Solutions
The main advantage of trading using opposite BANK MANDIRI and Element Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK MANDIRI position performs unexpectedly, Element Solutions 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 Element Solutions will offset losses from the drop in Element Solutions' long position.| BANK MANDIRI vs. Apple Inc | BANK MANDIRI vs. Apple Inc | BANK MANDIRI vs. Apple Inc | BANK MANDIRI vs. Microsoft |
| Element Solutions vs. GFL ENVIRONM | Element Solutions vs. RELIANCE STEEL AL | Element Solutions vs. Entravision Communications | Element Solutions vs. Caltagirone SpA |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Stocks Directory Find actively traded stocks across global markets | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |