Correlation Between Bank Mandiri and Gudang Garam
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Gudang Garam 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 Gudang Garam 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 Gudang Garam Tbk, you can compare the effects of market volatilities on Bank Mandiri and Gudang Garam 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 Gudang Garam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Gudang Garam.
Diversification Opportunities for Bank Mandiri and Gudang Garam
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bank and Gudang is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Gudang Garam Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gudang Garam 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 Gudang Garam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gudang Garam Tbk has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Gudang Garam go up and down completely randomly.
Pair Corralation between Bank Mandiri and Gudang Garam
Assuming the 90 days trading horizon Bank Mandiri Persero is expected to generate 1.57 times more return on investment than Gudang Garam. However, Bank Mandiri is 1.57 times more volatile than Gudang Garam Tbk. It trades about -0.07 of its potential returns per unit of risk. Gudang Garam Tbk is currently generating about -0.32 per unit of risk. If you would invest 675,000 in Bank Mandiri Persero on August 31, 2024 and sell it today you would lose (22,500) from holding Bank Mandiri Persero or give up 3.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Gudang Garam Tbk
Performance |
| Timeline |
| Bank Mandiri Persero |
| Gudang Garam Tbk |
Bank Mandiri and Gudang Garam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Gudang Garam
The main advantage of trading using opposite Bank Mandiri and Gudang Garam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Gudang Garam 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 Gudang Garam will offset losses from the drop in Gudang Garam's long position.| Bank Mandiri vs. Bank BRISyariah Tbk | Bank Mandiri vs. Ace Hardware Indonesia | Bank Mandiri vs. Merdeka Copper Gold | Bank Mandiri vs. Mitra Pinasthika Mustika |
| Gudang Garam vs. Indofood Cbp Sukses | Gudang Garam vs. Bank BRISyariah Tbk | Gudang Garam vs. Mitra Pinasthika Mustika | Gudang Garam vs. Jakarta Int Hotels |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |