Correlation Between Bank Mandiri and Planet Properindo
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Planet Properindo 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 Planet Properindo 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 Planet Properindo Jaya, you can compare the effects of market volatilities on Bank Mandiri and Planet Properindo 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 Planet Properindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Planet Properindo.
Diversification Opportunities for Bank Mandiri and Planet Properindo
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Planet is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Planet Properindo Jaya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Properindo Jaya 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 Planet Properindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Planet Properindo Jaya has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Planet Properindo go up and down completely randomly.
Pair Corralation between Bank Mandiri and Planet Properindo
Assuming the 90 days trading horizon Bank Mandiri Persero is expected to under-perform the Planet Properindo. But the stock apears to be less risky and, when comparing its historical volatility, Bank Mandiri Persero is 2.36 times less risky than Planet Properindo. The stock trades about -0.17 of its potential returns per unit of risk. The Planet Properindo Jaya is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 2,300 in Planet Properindo Jaya on September 1, 2024 and sell it today you would earn a total of 1,100 from holding Planet Properindo Jaya or generate 47.83% 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. Planet Properindo Jaya
Performance |
| Timeline |
| Bank Mandiri Persero |
| Planet Properindo Jaya |
Bank Mandiri and Planet Properindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Planet Properindo
The main advantage of trading using opposite Bank Mandiri and Planet Properindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Planet Properindo 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 Planet Properindo will offset losses from the drop in Planet Properindo'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 |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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