Correlation Between BANK MANDIRI and PTT OIL+RETBUS-FOR-B
Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI and PTT OIL+RETBUS-FOR-B 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 PTT OIL+RETBUS-FOR-B into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK MANDIRI and PTT OILRETBUS FOR BA10, you can compare the effects of market volatilities on BANK MANDIRI and PTT OIL+RETBUS-FOR-B 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 PTT OIL+RETBUS-FOR-B. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and PTT OIL+RETBUS-FOR-B.
Diversification Opportunities for BANK MANDIRI and PTT OIL+RETBUS-FOR-B
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BANK and PTT is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and PTT OILRETBUS FOR BA10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTT OIL+RETBUS-FOR-B 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 PTT OIL+RETBUS-FOR-B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTT OIL+RETBUS-FOR-B has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and PTT OIL+RETBUS-FOR-B go up and down completely randomly.
Pair Corralation between BANK MANDIRI and PTT OIL+RETBUS-FOR-B
Assuming the 90 days trading horizon BANK MANDIRI is expected to generate 2.48 times more return on investment than PTT OIL+RETBUS-FOR-B. However, BANK MANDIRI is 2.48 times more volatile than PTT OILRETBUS FOR BA10. It trades about -0.06 of its potential returns per unit of risk. PTT OILRETBUS FOR BA10 is currently generating about -0.19 per unit of risk. If you would invest 30.00 in BANK MANDIRI on December 27, 2024 and sell it today you would lose (8.00) from holding BANK MANDIRI or give up 26.67% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.41% |
Values | Daily Returns |
BANK MANDIRI vs. PTT OILRETBUS FOR BA10
Performance |
Timeline |
BANK MANDIRI |
PTT OIL+RETBUS-FOR-B |
BANK MANDIRI and PTT OIL+RETBUS-FOR-B Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BANK MANDIRI and PTT OIL+RETBUS-FOR-B
The main advantage of trading using opposite BANK MANDIRI and PTT OIL+RETBUS-FOR-B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK MANDIRI position performs unexpectedly, PTT OIL+RETBUS-FOR-B 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 PTT OIL+RETBUS-FOR-B will offset losses from the drop in PTT OIL+RETBUS-FOR-B's long position.BANK MANDIRI vs. CLOVER HEALTH INV | BANK MANDIRI vs. Cardinal Health | BANK MANDIRI vs. Universal Health Realty | BANK MANDIRI vs. PSI Software AG |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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