Correlation Between Bank Mandiri and Leyand International
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Leyand International 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 Leyand International 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 Leyand International Tbk, you can compare the effects of market volatilities on Bank Mandiri and Leyand International 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 Leyand International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Leyand International.
Diversification Opportunities for Bank Mandiri and Leyand International
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Leyand is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Leyand International Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leyand International 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 Leyand International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leyand International Tbk has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Leyand International go up and down completely randomly.
Pair Corralation between Bank Mandiri and Leyand International
Assuming the 90 days trading horizon Bank Mandiri Persero is expected to generate 0.78 times more return on investment than Leyand International. However, Bank Mandiri Persero is 1.28 times less risky than Leyand International. It trades about -0.17 of its potential returns per unit of risk. Leyand International Tbk is currently generating about -0.39 per unit of risk. If you would invest 670,000 in Bank Mandiri Persero on September 1, 2024 and sell it today you would lose (55,000) from holding Bank Mandiri Persero or give up 8.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Leyand International Tbk
Performance |
| Timeline |
| Bank Mandiri Persero |
| Leyand International Tbk |
Bank Mandiri and Leyand International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Leyand International
The main advantage of trading using opposite Bank Mandiri and Leyand International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Leyand International 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 Leyand International will offset losses from the drop in Leyand International'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 |
| Leyand International vs. Aneka Tambang Persero | Leyand International vs. Bukit Asam Tbk | Leyand International vs. Telkom Indonesia Tbk | Leyand International vs. Astra International Tbk |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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