Correlation Between Bank Mandiri and Whiting Petroleum
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Whiting Petroleum 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 Whiting Petroleum 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 Whiting Petroleum, you can compare the effects of market volatilities on Bank Mandiri and Whiting Petroleum 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 Whiting Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Whiting Petroleum.
Diversification Opportunities for Bank Mandiri and Whiting Petroleum
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Whiting is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Whiting Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whiting Petroleum 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 Whiting Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whiting Petroleum has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Whiting Petroleum go up and down completely randomly.
Pair Corralation between Bank Mandiri and Whiting Petroleum
Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the Whiting Petroleum. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Mandiri Persero is 3.35 times less risky than Whiting Petroleum. The pink sheet trades about -0.19 of its potential returns per unit of risk. The Whiting Petroleum is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 306.00 in Whiting Petroleum on October 8, 2024 and sell it today you would earn a total of 24.00 from holding Whiting Petroleum or generate 7.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Bank Mandiri Persero vs. Whiting Petroleum
Performance |
Timeline |
Bank Mandiri Persero |
Whiting Petroleum |
Bank Mandiri and Whiting Petroleum Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank Mandiri and Whiting Petroleum
The main advantage of trading using opposite Bank Mandiri and Whiting Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Whiting Petroleum 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 Whiting Petroleum will offset losses from the drop in Whiting Petroleum's long position.Bank Mandiri vs. PT Bank Rakyat | Bank Mandiri vs. Piraeus Bank SA | Bank Mandiri vs. Eurobank Ergasias Services | Bank Mandiri vs. Zions Bancorporation |
Whiting Petroleum vs. Chord Energy Corp | Whiting Petroleum vs. Bristow Group | Whiting Petroleum vs. Pioneer Bancorp |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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