Correlation Between BANK MANDIRI and Telecom Argentina
Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI and Telecom Argentina 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 Telecom Argentina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK MANDIRI and Telecom Argentina SA, you can compare the effects of market volatilities on BANK MANDIRI and Telecom Argentina 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 Telecom Argentina. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and Telecom Argentina.
Diversification Opportunities for BANK MANDIRI and Telecom Argentina
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BANK and Telecom is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and Telecom Argentina SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telecom Argentina 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 Telecom Argentina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telecom Argentina has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and Telecom Argentina go up and down completely randomly.
Pair Corralation between BANK MANDIRI and Telecom Argentina
Assuming the 90 days trading horizon BANK MANDIRI is expected to generate 2.55 times more return on investment than Telecom Argentina. However, BANK MANDIRI is 2.55 times more volatile than Telecom Argentina SA. It trades about 0.08 of its potential returns per unit of risk. Telecom Argentina SA is currently generating about -0.14 per unit of risk. If you would invest 30.00 in BANK MANDIRI on October 25, 2024 and sell it today you would earn a total of 2.00 from holding BANK MANDIRI or generate 6.67% 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. Telecom Argentina SA
Performance |
| Timeline |
| BANK MANDIRI |
| Telecom Argentina |
BANK MANDIRI and Telecom Argentina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK MANDIRI and Telecom Argentina
The main advantage of trading using opposite BANK MANDIRI and Telecom Argentina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK MANDIRI position performs unexpectedly, Telecom Argentina 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 Telecom Argentina will offset losses from the drop in Telecom Argentina's long position.| BANK MANDIRI vs. Gaztransport Technigaz SA | BANK MANDIRI vs. CHRYSALIS INVESTMENTS LTD | BANK MANDIRI vs. MidCap Financial Investment | BANK MANDIRI vs. Transport International Holdings |
| Telecom Argentina vs. Agilent Technologies | Telecom Argentina vs. SIERRA METALS | Telecom Argentina vs. UNIVERSAL MUSIC GROUP | Telecom Argentina vs. DAIDO METAL TD |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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