Correlation Between Bank Mandiri and Erste Group
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Erste 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 Erste Group 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 Erste Group Bank, you can compare the effects of market volatilities on Bank Mandiri and Erste 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 Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Erste Group.
Diversification Opportunities for Bank Mandiri and Erste Group
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Erste is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Erste Group Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erste Group Bank 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 Erste Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erste Group Bank has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Erste Group go up and down completely randomly.
Pair Corralation between Bank Mandiri and Erste Group
Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the Erste Group. In addition to that, Bank Mandiri is 1.3 times more volatile than Erste Group Bank. It trades about -0.25 of its total potential returns per unit of risk. Erste Group Bank is currently generating about 0.14 per unit of volatility. If you would invest 2,667 in Erste Group Bank on September 21, 2024 and sell it today you would earn a total of 388.00 from holding Erste Group Bank or generate 14.55% 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. Erste Group Bank
Performance |
Timeline |
Bank Mandiri Persero |
Erste Group Bank |
Bank Mandiri and Erste Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank Mandiri and Erste Group
The main advantage of trading using opposite Bank Mandiri and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Erste 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 Erste Group will offset losses from the drop in Erste Group's long position.Bank Mandiri vs. Morningstar Unconstrained Allocation | Bank Mandiri vs. Bondbloxx ETF Trust | Bank Mandiri vs. Spring Valley Acquisition | Bank Mandiri vs. Bondbloxx ETF Trust |
Erste Group vs. DBS Group Holdings | Erste Group vs. Swedbank AB | Erste Group vs. United Overseas Bank | Erste Group vs. Bank Mandiri Persero |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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