Correlation Between Bank Mandiri and Asuransi Ramayana
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Asuransi Ramayana 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 Asuransi Ramayana 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 Asuransi Ramayana Tbk, you can compare the effects of market volatilities on Bank Mandiri and Asuransi Ramayana 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 Asuransi Ramayana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Asuransi Ramayana.
Diversification Opportunities for Bank Mandiri and Asuransi Ramayana
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Asuransi is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Asuransi Ramayana Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asuransi Ramayana Tbk 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 Asuransi Ramayana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asuransi Ramayana Tbk has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Asuransi Ramayana go up and down completely randomly.
Pair Corralation between Bank Mandiri and Asuransi Ramayana
Assuming the 90 days trading horizon Bank Mandiri Persero is expected to generate 1.64 times more return on investment than Asuransi Ramayana. However, Bank Mandiri is 1.64 times more volatile than Asuransi Ramayana Tbk. It trades about 0.03 of its potential returns per unit of risk. Asuransi Ramayana Tbk is currently generating about -0.03 per unit of risk. If you would invest 563,673 in Bank Mandiri Persero on September 1, 2024 and sell it today you would earn a total of 51,327 from holding Bank Mandiri Persero or generate 9.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.61% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Asuransi Ramayana Tbk
Performance |
| Timeline |
| Bank Mandiri Persero |
| Asuransi Ramayana Tbk |
Bank Mandiri and Asuransi Ramayana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Asuransi Ramayana
The main advantage of trading using opposite Bank Mandiri and Asuransi Ramayana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Asuransi Ramayana 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 Asuransi Ramayana will offset losses from the drop in Asuransi Ramayana's long position.| Bank Mandiri vs. Bank Rakyat Indonesia | Bank Mandiri vs. Bank Central Asia | Bank Mandiri vs. Bank Negara Indonesia | Bank Mandiri vs. Astra International Tbk |
| Asuransi Ramayana vs. Asuransi Bintang Tbk | Asuransi Ramayana vs. Asuransi Dayin Mitra | Asuransi Ramayana vs. Asuransi Bina Dana | Asuransi Ramayana vs. Asuransi Jasa Tania |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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