Correlation Between Bank Mandiri and Tomra Systems
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Tomra Systems 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 Tomra Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Mandiri Persero and Tomra Systems ASA, you can compare the effects of market volatilities on Bank Mandiri and Tomra Systems 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 Tomra Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Tomra Systems.
Diversification Opportunities for Bank Mandiri and Tomra Systems
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Tomra is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Tomra Systems ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tomra Systems ASA 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 Persero are associated (or correlated) with Tomra Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tomra Systems ASA has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Tomra Systems go up and down completely randomly.
Pair Corralation between Bank Mandiri and Tomra Systems
Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the Tomra Systems. In addition to that, Bank Mandiri is 2.14 times more volatile than Tomra Systems ASA. It trades about -0.06 of its total potential returns per unit of risk. Tomra Systems ASA is currently generating about 0.12 per unit of volatility. If you would invest 1,282 in Tomra Systems ASA on December 2, 2024 and sell it today you would earn a total of 194.00 from holding Tomra Systems ASA or generate 15.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Bank Mandiri Persero vs. Tomra Systems ASA
Performance |
Timeline |
Bank Mandiri Persero |
Tomra Systems ASA |
Bank Mandiri and Tomra Systems Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank Mandiri and Tomra Systems
The main advantage of trading using opposite Bank Mandiri and Tomra Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Tomra Systems 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 Tomra Systems will offset losses from the drop in Tomra Systems' long position.Bank Mandiri vs. HDFC Bank Limited | Bank Mandiri vs. China Merchants Bank | Bank Mandiri vs. China Merchants Bank | Bank Mandiri vs. Fifth Third Bancorp |
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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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