Correlation Between Bank Mandiri and Benakat Petroleum
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Benakat Petroleum 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 Benakat Petroleum 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 Benakat Petroleum Energy, you can compare the effects of market volatilities on Bank Mandiri and Benakat Petroleum 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 Benakat Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Benakat Petroleum.
Diversification Opportunities for Bank Mandiri and Benakat Petroleum
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Benakat is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Benakat Petroleum Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benakat Petroleum Energy 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 Benakat Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benakat Petroleum Energy has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Benakat Petroleum go up and down completely randomly.
Pair Corralation between Bank Mandiri and Benakat Petroleum
Assuming the 90 days trading horizon Bank Mandiri Persero is expected to generate 0.52 times more return on investment than Benakat Petroleum. However, Bank Mandiri Persero is 1.93 times less risky than Benakat Petroleum. It trades about -0.07 of its potential returns per unit of risk. Benakat Petroleum Energy is currently generating about -0.18 per unit of risk. If you would invest 682,500 in Bank Mandiri Persero on August 28, 2024 and sell it today you would lose (22,500) from holding Bank Mandiri Persero or give up 3.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Benakat Petroleum Energy
Performance |
| Timeline |
| Bank Mandiri Persero |
| Benakat Petroleum Energy |
Bank Mandiri and Benakat Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Benakat Petroleum
The main advantage of trading using opposite Bank Mandiri and Benakat Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Benakat Petroleum 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 Benakat Petroleum will offset losses from the drop in Benakat Petroleum'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 |
| Benakat Petroleum vs. Bumi Resources Minerals | Benakat Petroleum vs. Energi Mega Persada | Benakat Petroleum vs. Delta Dunia Makmur | Benakat Petroleum vs. Darma Henwa Tbk |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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