Correlation Between Bank Mandiri and Tanah Laut
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Tanah Laut 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 Tanah Laut 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 Tanah Laut Tbk, you can compare the effects of market volatilities on Bank Mandiri and Tanah Laut 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 Tanah Laut. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Tanah Laut.
Diversification Opportunities for Bank Mandiri and Tanah Laut
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Tanah is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Tanah Laut Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tanah Laut 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 Tanah Laut. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tanah Laut Tbk has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Tanah Laut go up and down completely randomly.
Pair Corralation between Bank Mandiri and Tanah Laut
Assuming the 90 days trading horizon Bank Mandiri Persero is expected to generate 0.42 times more return on investment than Tanah Laut. However, Bank Mandiri Persero is 2.38 times less risky than Tanah Laut. It trades about 0.04 of its potential returns per unit of risk. Tanah Laut Tbk is currently generating about -0.03 per unit of risk. If you would invest 469,544 in Bank Mandiri Persero on November 5, 2024 and sell it today you would earn a total of 142,956 from holding Bank Mandiri Persero or generate 30.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Tanah Laut Tbk
Performance |
| Timeline |
| Bank Mandiri Persero |
| Tanah Laut Tbk |
Bank Mandiri and Tanah Laut Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Tanah Laut
The main advantage of trading using opposite Bank Mandiri and Tanah Laut positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Tanah Laut 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 Tanah Laut will offset losses from the drop in Tanah Laut'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 |
| Tanah Laut vs. Inter Delta Tbk | Tanah Laut vs. Humpuss Intermoda Transportasi | Tanah Laut vs. Fortune Indonesia Tbk | Tanah Laut vs. PT MNC Energy |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |