Correlation Between Bank Mandiri and Roche Holding
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Roche Holding 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 Roche Holding 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 Roche Holding Ltd, you can compare the effects of market volatilities on Bank Mandiri and Roche Holding 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 Roche Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Roche Holding.
Diversification Opportunities for Bank Mandiri and Roche Holding
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Roche is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Roche Holding Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roche Holding 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 Roche Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roche Holding has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Roche Holding go up and down completely randomly.
Pair Corralation between Bank Mandiri and Roche Holding
Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the Roche Holding. In addition to that, Bank Mandiri is 2.16 times more volatile than Roche Holding Ltd. It trades about -0.17 of its total potential returns per unit of risk. Roche Holding Ltd is currently generating about 0.21 per unit of volatility. If you would invest 3,608 in Roche Holding Ltd on December 2, 2024 and sell it today you would earn a total of 573.00 from holding Roche Holding Ltd or generate 15.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Bank Mandiri Persero vs. Roche Holding Ltd
Performance |
Timeline |
Bank Mandiri Persero |
Roche Holding |
Bank Mandiri and Roche Holding Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank Mandiri and Roche Holding
The main advantage of trading using opposite Bank Mandiri and Roche Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Roche Holding 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 Roche Holding will offset losses from the drop in Roche Holding'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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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