Correlation Between Bank Mandiri and NextSource Materials
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and NextSource Materials 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 NextSource Materials 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 NextSource Materials, you can compare the effects of market volatilities on Bank Mandiri and NextSource Materials 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 NextSource Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and NextSource Materials.
Diversification Opportunities for Bank Mandiri and NextSource Materials
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and NextSource is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and NextSource Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextSource Materials 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 NextSource Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NextSource Materials has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and NextSource Materials go up and down completely randomly.
Pair Corralation between Bank Mandiri and NextSource Materials
Assuming the 90 days horizon Bank Mandiri Persero is expected to generate 0.53 times more return on investment than NextSource Materials. However, Bank Mandiri Persero is 1.9 times less risky than NextSource Materials. It trades about -0.14 of its potential returns per unit of risk. NextSource Materials is currently generating about -0.11 per unit of risk. If you would invest 1,867 in Bank Mandiri Persero on September 6, 2024 and sell it today you would lose (312.00) from holding Bank Mandiri Persero or give up 16.71% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Bank Mandiri Persero vs. NextSource Materials
Performance |
Timeline |
Bank Mandiri Persero |
NextSource Materials |
Bank Mandiri and NextSource Materials Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank Mandiri and NextSource Materials
The main advantage of trading using opposite Bank Mandiri and NextSource Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, NextSource Materials 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 NextSource Materials will offset losses from the drop in NextSource Materials' long position.Bank Mandiri vs. Bank Rakyat | Bank Mandiri vs. Eurobank Ergasias Services | Bank Mandiri vs. Nedbank Group | Bank Mandiri vs. Standard Bank Group |
NextSource Materials vs. Leading Edge Materials | NextSource Materials vs. Syrah Resources Limited | NextSource Materials vs. Mason Graphite | NextSource Materials vs. Graphite One |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
Transaction History View history of all your transactions and understand their impact on performance | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation |