Correlation Between Bank Mandiri and Ladangbaja Murni
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Ladangbaja Murni 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 Ladangbaja Murni 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 Ladangbaja Murni PT, you can compare the effects of market volatilities on Bank Mandiri and Ladangbaja Murni 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 Ladangbaja Murni. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Ladangbaja Murni.
Diversification Opportunities for Bank Mandiri and Ladangbaja Murni
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Ladangbaja is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Ladangbaja Murni PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ladangbaja Murni 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 Ladangbaja Murni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ladangbaja Murni has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Ladangbaja Murni go up and down completely randomly.
Pair Corralation between Bank Mandiri and Ladangbaja Murni
Assuming the 90 days trading horizon Bank Mandiri Persero is expected to generate 0.35 times more return on investment than Ladangbaja Murni. However, Bank Mandiri Persero is 2.86 times less risky than Ladangbaja Murni. It trades about -0.11 of its potential returns per unit of risk. Ladangbaja Murni PT is currently generating about -0.11 per unit of risk. If you would invest 682,500 in Bank Mandiri Persero on August 29, 2024 and sell it today you would lose (37,500) from holding Bank Mandiri Persero or give up 5.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Ladangbaja Murni PT
Performance |
| Timeline |
| Bank Mandiri Persero |
| Ladangbaja Murni |
Bank Mandiri and Ladangbaja Murni Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Ladangbaja Murni
The main advantage of trading using opposite Bank Mandiri and Ladangbaja Murni positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Ladangbaja Murni 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 Ladangbaja Murni will offset losses from the drop in Ladangbaja Murni'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 |
| Ladangbaja Murni vs. PAM Mineral Tbk | Ladangbaja Murni vs. Nusa Palapa Gemilang | Ladangbaja Murni vs. PT Harapan Duta | Ladangbaja Murni vs. Diagnos Laboratorium Utama |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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