Correlation Between BANK MANDIRI and Lenovo Group
Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI and Lenovo Group 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 Lenovo Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK MANDIRI and Lenovo Group Limited, you can compare the effects of market volatilities on BANK MANDIRI and Lenovo Group 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 Lenovo Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and Lenovo Group.
Diversification Opportunities for BANK MANDIRI and Lenovo Group
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BANK and Lenovo is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and Lenovo Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lenovo Group Limited 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 are associated (or correlated) with Lenovo Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lenovo Group Limited has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and Lenovo Group go up and down completely randomly.
Pair Corralation between BANK MANDIRI and Lenovo Group
Assuming the 90 days trading horizon BANK MANDIRI is expected to under-perform the Lenovo Group. But the stock apears to be less risky and, when comparing its historical volatility, BANK MANDIRI is 2.43 times less risky than Lenovo Group. The stock trades about -0.31 of its potential returns per unit of risk. The Lenovo Group Limited is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,280 in Lenovo Group Limited on October 4, 2024 and sell it today you would earn a total of 140.00 from holding Lenovo Group Limited or generate 6.14% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
BANK MANDIRI vs. Lenovo Group Limited
Performance |
Timeline |
BANK MANDIRI |
Lenovo Group Limited |
BANK MANDIRI and Lenovo Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BANK MANDIRI and Lenovo Group
The main advantage of trading using opposite BANK MANDIRI and Lenovo Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK MANDIRI position performs unexpectedly, Lenovo Group 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 Lenovo Group will offset losses from the drop in Lenovo Group's long position.BANK MANDIRI vs. RYANAIR HLDGS ADR | BANK MANDIRI vs. SEALED AIR | BANK MANDIRI vs. MagnaChip Semiconductor Corp | BANK MANDIRI vs. Elmos Semiconductor SE |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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