Correlation Between Bank Mandiri and Environmmtl Tectonic
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Environmmtl Tectonic 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 Environmmtl Tectonic 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 Environmmtl Tectonic, you can compare the effects of market volatilities on Bank Mandiri and Environmmtl Tectonic 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 Environmmtl Tectonic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Environmmtl Tectonic.
Diversification Opportunities for Bank Mandiri and Environmmtl Tectonic
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Environmmtl is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Environmmtl Tectonic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Environmmtl Tectonic 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 Environmmtl Tectonic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Environmmtl Tectonic has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Environmmtl Tectonic go up and down completely randomly.
Pair Corralation between Bank Mandiri and Environmmtl Tectonic
Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the Environmmtl Tectonic. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Mandiri Persero is 1.28 times less risky than Environmmtl Tectonic. The pink sheet trades about -0.18 of its potential returns per unit of risk. The Environmmtl Tectonic is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 184.00 in Environmmtl Tectonic on October 5, 2024 and sell it today you would earn a total of 11.00 from holding Environmmtl Tectonic or generate 5.98% 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. Environmmtl Tectonic
Performance |
Timeline |
Bank Mandiri Persero |
Environmmtl Tectonic |
Bank Mandiri and Environmmtl Tectonic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank Mandiri and Environmmtl Tectonic
The main advantage of trading using opposite Bank Mandiri and Environmmtl Tectonic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Environmmtl Tectonic 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 Environmmtl Tectonic will offset losses from the drop in Environmmtl Tectonic's long position.Bank Mandiri vs. Bank Rakyat | Bank Mandiri vs. Eurobank Ergasias Services | Bank Mandiri vs. Nedbank Group | Bank Mandiri vs. Standard Bank Group |
Environmmtl Tectonic vs. V2X Inc | Environmmtl Tectonic vs. National Presto Industries | Environmmtl Tectonic vs. Woodward | Environmmtl Tectonic vs. Hexcel |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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