Correlation Between Bank Mandiri and Pratama Abadi
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Pratama Abadi 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 Pratama Abadi 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 Pratama Abadi Nusa, you can compare the effects of market volatilities on Bank Mandiri and Pratama Abadi 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 Pratama Abadi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Pratama Abadi.
Diversification Opportunities for Bank Mandiri and Pratama Abadi
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Pratama is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Pratama Abadi Nusa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pratama Abadi Nusa 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 Pratama Abadi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pratama Abadi Nusa has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Pratama Abadi go up and down completely randomly.
Pair Corralation between Bank Mandiri and Pratama Abadi
Assuming the 90 days trading horizon Bank Mandiri Persero is expected to under-perform the Pratama Abadi. But the stock apears to be less risky and, when comparing its historical volatility, Bank Mandiri Persero is 1.87 times less risky than Pratama Abadi. The stock trades about -0.18 of its potential returns per unit of risk. The Pratama Abadi Nusa is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,490,000 in Pratama Abadi Nusa on August 31, 2024 and sell it today you would earn a total of 65,000 from holding Pratama Abadi Nusa or generate 4.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Pratama Abadi Nusa
Performance |
| Timeline |
| Bank Mandiri Persero |
| Pratama Abadi Nusa |
Bank Mandiri and Pratama Abadi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Pratama Abadi
The main advantage of trading using opposite Bank Mandiri and Pratama Abadi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Pratama Abadi 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 Pratama Abadi will offset losses from the drop in Pratama Abadi'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 |
| Pratama Abadi vs. Garudafood Putra Putri | Pratama Abadi vs. Estika Tata Tiara | Pratama Abadi vs. Campina Ice Cream | Pratama Abadi vs. PT Wahana Interfood |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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