Correlation Between Bank Mandiri and Palma Serasih
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Palma Serasih 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 Palma Serasih 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 Palma Serasih PT, you can compare the effects of market volatilities on Bank Mandiri and Palma Serasih 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 Palma Serasih. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Palma Serasih.
Diversification Opportunities for Bank Mandiri and Palma Serasih
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Palma is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Palma Serasih PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palma Serasih PT 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 Palma Serasih. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palma Serasih PT has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Palma Serasih go up and down completely randomly.
Pair Corralation between Bank Mandiri and Palma Serasih
Assuming the 90 days trading horizon Bank Mandiri Persero is expected to generate 1.12 times more return on investment than Palma Serasih. However, Bank Mandiri is 1.12 times more volatile than Palma Serasih PT. It trades about 0.21 of its potential returns per unit of risk. Palma Serasih PT is currently generating about 0.12 per unit of risk. If you would invest 567,500 in Bank Mandiri Persero on November 5, 2024 and sell it today you would earn a total of 45,000 from holding Bank Mandiri Persero or generate 7.93% 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. Palma Serasih PT
Performance |
| Timeline |
| Bank Mandiri Persero |
| Palma Serasih PT |
Bank Mandiri and Palma Serasih Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Palma Serasih
The main advantage of trading using opposite Bank Mandiri and Palma Serasih positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Palma Serasih 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 Palma Serasih will offset losses from the drop in Palma Serasih'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 |
| Palma Serasih vs. Mahkota Group Tbk | Palma Serasih vs. Provident Agro Tbk | Palma Serasih vs. Putra Mandiri Jembar | Palma Serasih vs. Cisadane Sawit Raya |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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