Correlation Between Bank Mandiri and Bank Jabar
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Bank Jabar 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 Bank Jabar 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 Bank Jabar, you can compare the effects of market volatilities on Bank Mandiri and Bank Jabar 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 Bank Jabar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Bank Jabar.
Diversification Opportunities for Bank Mandiri and Bank Jabar
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Bank is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Bank Jabar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Jabar 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 Bank Jabar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Jabar has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Bank Jabar go up and down completely randomly.
Pair Corralation between Bank Mandiri and Bank Jabar
Assuming the 90 days trading horizon Bank Mandiri Persero is expected to under-perform the Bank Jabar. In addition to that, Bank Mandiri is 2.59 times more volatile than Bank Jabar. It trades about -0.12 of its total potential returns per unit of risk. Bank Jabar is currently generating about -0.06 per unit of volatility. If you would invest 97,000 in Bank Jabar on August 29, 2024 and sell it today you would lose (1,000.00) from holding Bank Jabar or give up 1.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Bank Jabar
Performance |
| Timeline |
| Bank Mandiri Persero |
| Bank Jabar |
Bank Mandiri and Bank Jabar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Bank Jabar
The main advantage of trading using opposite Bank Mandiri and Bank Jabar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Bank Jabar 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 Jabar will offset losses from the drop in Bank Jabar'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 |
| Bank Jabar vs. Bank Pembangunan Timur | Bank Jabar vs. Bank Tabungan Negara | Bank Jabar vs. Bank Danamon Indonesia | Bank Jabar vs. Bumi Serpong Damai |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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