Correlation Between Bank Negara and Mullen Group
Can any of the company-specific risk be diversified away by investing in both Bank Negara and Mullen Group 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 Negara and Mullen Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Negara Indonesia and Mullen Group, you can compare the effects of market volatilities on Bank Negara and Mullen Group 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 Negara with a short position of Mullen Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Negara and Mullen Group.
Diversification Opportunities for Bank Negara and Mullen Group
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Mullen is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Bank Negara Indonesia and Mullen Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mullen Group and Bank Negara 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 Negara Indonesia are associated (or correlated) with Mullen Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mullen Group has no effect on the direction of Bank Negara i.e., Bank Negara and Mullen Group go up and down completely randomly.
Pair Corralation between Bank Negara and Mullen Group
Assuming the 90 days horizon Bank Negara Indonesia is expected to under-perform the Mullen Group. In addition to that, Bank Negara is 4.8 times more volatile than Mullen Group. It trades about -0.05 of its total potential returns per unit of risk. Mullen Group is currently generating about 0.06 per unit of volatility. If you would invest 1,085 in Mullen Group on September 2, 2024 and sell it today you would earn a total of 10.00 from holding Mullen Group or generate 0.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Bank Negara Indonesia vs. Mullen Group
Performance |
| Timeline |
| Bank Negara Indonesia |
| Mullen Group |
Bank Negara and Mullen Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Negara and Mullen Group
The main advantage of trading using opposite Bank Negara and Mullen Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Negara position performs unexpectedly, Mullen Group 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 Mullen Group will offset losses from the drop in Mullen Group's long position.| Bank Negara vs. Piraeus Bank SA | Bank Negara vs. Turkiye Garanti Bankasi | Bank Negara vs. Uwharrie Capital Corp |
| Mullen Group vs. ArcBest Corp | Mullen Group vs. Old Dominion Freight | Mullen Group vs. Saia Inc | Mullen Group vs. XPO Logistics |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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