Correlation Between BANK MANDIRI and SES SA
Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI and SES SA 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 SES SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK MANDIRI and SES SA, you can compare the effects of market volatilities on BANK MANDIRI and SES SA 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 SES SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and SES SA.
Diversification Opportunities for BANK MANDIRI and SES SA
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BANK and SES is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and SES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SES SA 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 SES SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SES SA has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and SES SA go up and down completely randomly.
Pair Corralation between BANK MANDIRI and SES SA
Assuming the 90 days trading horizon BANK MANDIRI is expected to generate 1.63 times more return on investment than SES SA. However, BANK MANDIRI is 1.63 times more volatile than SES SA. It trades about 0.03 of its potential returns per unit of risk. SES SA is currently generating about -0.03 per unit of risk. If you would invest 27.00 in BANK MANDIRI on August 29, 2024 and sell it today you would earn a total of 7.00 from holding BANK MANDIRI or generate 25.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK MANDIRI vs. SES SA
Performance |
| Timeline |
| BANK MANDIRI |
| SES SA |
BANK MANDIRI and SES SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK MANDIRI and SES SA
The main advantage of trading using opposite BANK MANDIRI and SES SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK MANDIRI position performs unexpectedly, SES SA 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 SES SA will offset losses from the drop in SES SA's long position.| BANK MANDIRI vs. Fast Retailing Co | BANK MANDIRI vs. Vastned Retail NV | BANK MANDIRI vs. Globe Trade Centre | BANK MANDIRI vs. United Breweries Co |
| SES SA vs. KRISPY KREME DL 01 | SES SA vs. Consolidated Communications Holdings | SES SA vs. INTER CARS SA | SES SA vs. GRUPO CARSO A1 |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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