Correlation Between Bank Mandiri and Morgan Stanley
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Morgan Stanley 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 Morgan Stanley 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 Morgan Stanley Direct, you can compare the effects of market volatilities on Bank Mandiri and Morgan Stanley 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 Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Morgan Stanley.
Diversification Opportunities for Bank Mandiri and Morgan Stanley
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Morgan is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Morgan Stanley Direct in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley Direct 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 Morgan Stanley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morgan Stanley Direct has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Morgan Stanley go up and down completely randomly.
Pair Corralation between Bank Mandiri and Morgan Stanley
Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the Morgan Stanley. In addition to that, Bank Mandiri is 1.99 times more volatile than Morgan Stanley Direct. It trades about -0.29 of its total potential returns per unit of risk. Morgan Stanley Direct is currently generating about 0.02 per unit of volatility. If you would invest 2,059 in Morgan Stanley Direct on October 4, 2024 and sell it today you would earn a total of 7.00 from holding Morgan Stanley Direct or generate 0.34% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Bank Mandiri Persero vs. Morgan Stanley Direct
Performance |
Timeline |
Bank Mandiri Persero |
Morgan Stanley Direct |
Bank Mandiri and Morgan Stanley Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank Mandiri and Morgan Stanley
The main advantage of trading using opposite Bank Mandiri and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Morgan Stanley 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 Morgan Stanley will offset losses from the drop in Morgan Stanley'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 |
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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 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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