Correlation Between Bank Mandiri and Mitrabara Adiperdana
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Mitrabara Adiperdana 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 Mitrabara Adiperdana 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 Mitrabara Adiperdana PT, you can compare the effects of market volatilities on Bank Mandiri and Mitrabara Adiperdana 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 Mitrabara Adiperdana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Mitrabara Adiperdana.
Diversification Opportunities for Bank Mandiri and Mitrabara Adiperdana
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Mitrabara is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Mitrabara Adiperdana PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitrabara Adiperdana 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 Mitrabara Adiperdana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitrabara Adiperdana has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Mitrabara Adiperdana go up and down completely randomly.
Pair Corralation between Bank Mandiri and Mitrabara Adiperdana
Assuming the 90 days trading horizon Bank Mandiri Persero is expected to generate 0.91 times more return on investment than Mitrabara Adiperdana. However, Bank Mandiri Persero is 1.1 times less risky than Mitrabara Adiperdana. It trades about 0.05 of its potential returns per unit of risk. Mitrabara Adiperdana PT is currently generating about -0.05 per unit of risk. If you would invest 478,051 in Bank Mandiri Persero on August 31, 2024 and sell it today you would earn a total of 136,949 from holding Bank Mandiri Persero or generate 28.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.72% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Mitrabara Adiperdana PT
Performance |
| Timeline |
| Bank Mandiri Persero |
| Mitrabara Adiperdana |
Bank Mandiri and Mitrabara Adiperdana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Mitrabara Adiperdana
The main advantage of trading using opposite Bank Mandiri and Mitrabara Adiperdana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Mitrabara Adiperdana 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 Mitrabara Adiperdana will offset losses from the drop in Mitrabara Adiperdana'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 |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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