Correlation Between Bank Mandiri and Tate Lyle
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Tate Lyle 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 Tate Lyle 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 Tate Lyle PLC, you can compare the effects of market volatilities on Bank Mandiri and Tate Lyle 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 Tate Lyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Tate Lyle.
Diversification Opportunities for Bank Mandiri and Tate Lyle
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Tate is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Tate Lyle PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tate Lyle PLC 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 Tate Lyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tate Lyle PLC has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Tate Lyle go up and down completely randomly.
Pair Corralation between Bank Mandiri and Tate Lyle
Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the Tate Lyle. In addition to that, Bank Mandiri is 1.24 times more volatile than Tate Lyle PLC. It trades about -0.03 of its total potential returns per unit of risk. Tate Lyle PLC is currently generating about 0.04 per unit of volatility. If you would invest 3,131 in Tate Lyle PLC on February 1, 2024 and sell it today you would earn a total of 31.00 from holding Tate Lyle PLC or generate 0.99% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Bank Mandiri Persero vs. Tate Lyle PLC
Performance |
Timeline |
Bank Mandiri Persero |
Tate Lyle PLC |
Bank Mandiri and Tate Lyle Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank Mandiri and Tate Lyle
The main advantage of trading using opposite Bank Mandiri and Tate Lyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Tate Lyle 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 Tate Lyle will offset losses from the drop in Tate Lyle's long position.Bank Mandiri vs. Home Federal Bancorp | Bank Mandiri vs. HMN Financial | Bank Mandiri vs. Affinity Bancshares | Bank Mandiri vs. Community West Bancshares |
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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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