Correlation Between Bank Mandiri and Teladan Prima
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Teladan Prima 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 Teladan Prima 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 Teladan Prima Agro, you can compare the effects of market volatilities on Bank Mandiri and Teladan Prima 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 Teladan Prima. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Teladan Prima.
Diversification Opportunities for Bank Mandiri and Teladan Prima
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Teladan is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Teladan Prima Agro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teladan Prima Agro 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 Teladan Prima. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teladan Prima Agro has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Teladan Prima go up and down completely randomly.
Pair Corralation between Bank Mandiri and Teladan Prima
Assuming the 90 days trading horizon Bank Mandiri Persero is expected to generate 1.3 times more return on investment than Teladan Prima. However, Bank Mandiri is 1.3 times more volatile than Teladan Prima Agro. It trades about 0.06 of its potential returns per unit of risk. Teladan Prima Agro is currently generating about 0.0 per unit of risk. If you would invest 446,916 in Bank Mandiri Persero on August 27, 2024 and sell it today you would earn a total of 178,084 from holding Bank Mandiri Persero or generate 39.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Teladan Prima Agro
Performance |
| Timeline |
| Bank Mandiri Persero |
| Teladan Prima Agro |
Bank Mandiri and Teladan Prima Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Teladan Prima
The main advantage of trading using opposite Bank Mandiri and Teladan Prima positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Teladan Prima 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 Teladan Prima will offset losses from the drop in Teladan Prima'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 |
| Teladan Prima vs. Sumber Tani Agung | Teladan Prima vs. Wir Asia Tbk | Teladan Prima vs. Triputra Agro Persada | Teladan Prima vs. Net Visi Media |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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