Correlation Between Exxon and Bank Mandiri
Can any of the company-specific risk be diversified away by investing in both Exxon and Bank Mandiri 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 Exxon and Bank Mandiri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exxon Mobil Corp and Bank Mandiri Persero, you can compare the effects of market volatilities on Exxon and Bank Mandiri 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 Exxon with a short position of Bank Mandiri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Bank Mandiri.
Diversification Opportunities for Exxon and Bank Mandiri
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Exxon and Bank is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Bank Mandiri Persero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Mandiri Persero and Exxon 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 Exxon Mobil Corp are associated (or correlated) with Bank Mandiri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Mandiri Persero has no effect on the direction of Exxon i.e., Exxon and Bank Mandiri go up and down completely randomly.
Pair Corralation between Exxon and Bank Mandiri
Considering the 90-day investment horizon Exxon Mobil Corp is expected to generate 0.64 times more return on investment than Bank Mandiri. However, Exxon Mobil Corp is 1.56 times less risky than Bank Mandiri. It trades about 0.09 of its potential returns per unit of risk. Bank Mandiri Persero is currently generating about -0.34 per unit of risk. If you would invest 11,929 in Exxon Mobil Corp on August 24, 2024 and sell it today you would earn a total of 264.00 from holding Exxon Mobil Corp or generate 2.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exxon Mobil Corp vs. Bank Mandiri Persero
Performance |
| Timeline |
| Exxon Mobil Corp |
| Bank Mandiri Persero |
Exxon and Bank Mandiri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and Bank Mandiri
The main advantage of trading using opposite Exxon and Bank Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Bank Mandiri 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 Bank Mandiri will offset losses from the drop in Bank Mandiri's long position.| Exxon vs. Chevron Corp | Exxon vs. Small Cap Core | Exxon vs. Freedom Holding Corp | Exxon vs. Gfl Environmental Holdings |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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