Correlation Between Bank Mandiri and Bhuwanatala Indah
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Bhuwanatala Indah 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 Bhuwanatala Indah 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 Bhuwanatala Indah Permai, you can compare the effects of market volatilities on Bank Mandiri and Bhuwanatala Indah 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 Bhuwanatala Indah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Bhuwanatala Indah.
Diversification Opportunities for Bank Mandiri and Bhuwanatala Indah
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Bhuwanatala is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Bhuwanatala Indah Permai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bhuwanatala Indah Permai 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 Bhuwanatala Indah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bhuwanatala Indah Permai has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Bhuwanatala Indah go up and down completely randomly.
Pair Corralation between Bank Mandiri and Bhuwanatala Indah
Assuming the 90 days trading horizon Bank Mandiri Persero is expected to generate 0.51 times more return on investment than Bhuwanatala Indah. However, Bank Mandiri Persero is 1.96 times less risky than Bhuwanatala Indah. It trades about -0.29 of its potential returns per unit of risk. Bhuwanatala Indah Permai is currently generating about -0.28 per unit of risk. If you would invest 587,500 in Bank Mandiri Persero on November 18, 2024 and sell it today you would lose (77,500) from holding Bank Mandiri Persero or give up 13.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Bhuwanatala Indah Permai
Performance |
| Timeline |
| Bank Mandiri Persero |
| Bhuwanatala Indah Permai |
Bank Mandiri and Bhuwanatala Indah Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Bhuwanatala Indah
The main advantage of trading using opposite Bank Mandiri and Bhuwanatala Indah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Bhuwanatala Indah 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 Bhuwanatala Indah will offset losses from the drop in Bhuwanatala Indah'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 |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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