Correlation Between Bank Mandiri and J Resources
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and J Resources 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 J Resources 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 J Resources Asia, you can compare the effects of market volatilities on Bank Mandiri and J Resources 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 J Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and J Resources.
Diversification Opportunities for Bank Mandiri and J Resources
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bank and PSAB is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and J Resources Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Resources Asia 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 J Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Resources Asia has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and J Resources go up and down completely randomly.
Pair Corralation between Bank Mandiri and J Resources
Assuming the 90 days trading horizon Bank Mandiri Persero is expected to under-perform the J Resources. But the stock apears to be less risky and, when comparing its historical volatility, Bank Mandiri Persero is 2.26 times less risky than J Resources. The stock trades about -0.38 of its potential returns per unit of risk. The J Resources Asia is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 21,600 in J Resources Asia on November 28, 2024 and sell it today you would earn a total of 7,000 from holding J Resources Asia or generate 32.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Mandiri Persero vs. J Resources Asia
Performance |
| Timeline |
| Bank Mandiri Persero |
| J Resources Asia |
Bank Mandiri and J Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and J Resources
The main advantage of trading using opposite Bank Mandiri and J Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, J Resources 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 J Resources will offset losses from the drop in J Resources' 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 |
| J Resources vs. Merdeka Copper Gold | J Resources vs. Golden Eagle Energy | J Resources vs. Rukun Raharja Tbk | J Resources vs. Wilton Makmur Indonesia |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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