Correlation Between Nordea Bank and Bank Mandiri
Can any of the company-specific risk be diversified away by investing in both Nordea Bank and Bank Mandiri 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 Nordea Bank and Bank Mandiri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nordea Bank Abp and Bank Mandiri Persero, you can compare the effects of market volatilities on Nordea Bank and Bank Mandiri 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 Nordea Bank with a short position of Bank Mandiri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea Bank and Bank Mandiri.
Diversification Opportunities for Nordea Bank and Bank Mandiri
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nordea and Bank is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Nordea Bank Abp and Bank Mandiri Persero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Mandiri Persero and Nordea Bank 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 Nordea Bank Abp are associated (or correlated) with Bank Mandiri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Mandiri Persero has no effect on the direction of Nordea Bank i.e., Nordea Bank and Bank Mandiri go up and down completely randomly.
Pair Corralation between Nordea Bank and Bank Mandiri
Assuming the 90 days horizon Nordea Bank Abp is expected to generate 0.76 times more return on investment than Bank Mandiri. However, Nordea Bank Abp is 1.32 times less risky than Bank Mandiri. It trades about 0.02 of its potential returns per unit of risk. Bank Mandiri Persero is currently generating about -0.13 per unit of risk. If you would invest 1,209 in Nordea Bank Abp on February 26, 2024 and sell it today you would earn a total of 11.00 from holding Nordea Bank Abp or generate 0.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Nordea Bank Abp vs. Bank Mandiri Persero
Performance |
Timeline |
Nordea Bank Abp |
Bank Mandiri Persero |
Nordea Bank and Bank Mandiri Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nordea Bank and Bank Mandiri
The main advantage of trading using opposite Nordea Bank and Bank Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea Bank position performs unexpectedly, Bank Mandiri 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 Bank Mandiri will offset losses from the drop in Bank Mandiri's long position.Nordea Bank vs. First Hawaiian | Nordea Bank vs. Central Pacific Financial | Nordea Bank vs. Territorial Bancorp | Nordea Bank vs. Comerica |
Bank Mandiri vs. First Hawaiian | Bank Mandiri vs. Central Pacific Financial | Bank Mandiri vs. Territorial Bancorp | Bank Mandiri vs. Comerica |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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