Correlation Between Bank Mandiri and PT Verona
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and PT Verona 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 PT Verona 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 PT Verona Indah, you can compare the effects of market volatilities on Bank Mandiri and PT Verona 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 PT Verona. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and PT Verona.
Diversification Opportunities for Bank Mandiri and PT Verona
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and VERN is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and PT Verona Indah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Verona Indah 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 PT Verona. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Verona Indah has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and PT Verona go up and down completely randomly.
Pair Corralation between Bank Mandiri and PT Verona
Assuming the 90 days trading horizon Bank Mandiri Persero is expected to generate 0.66 times more return on investment than PT Verona. However, Bank Mandiri Persero is 1.52 times less risky than PT Verona. It trades about -0.37 of its potential returns per unit of risk. PT Verona Indah is currently generating about -0.27 per unit of risk. If you would invest 707,500 in Bank Mandiri Persero on August 24, 2024 and sell it today you would lose (90,000) from holding Bank Mandiri Persero or give up 12.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Mandiri Persero vs. PT Verona Indah
Performance |
| Timeline |
| Bank Mandiri Persero |
| PT Verona Indah |
Bank Mandiri and PT Verona Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and PT Verona
The main advantage of trading using opposite Bank Mandiri and PT Verona positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, PT Verona 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 PT Verona will offset losses from the drop in PT Verona'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 |
| PT Verona vs. Metrodata Electronics Tbk | PT Verona vs. Protech Mitra Perkasa | PT Verona vs. Chandra Asri Petrochemical | PT Verona vs. Ace Hardware 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |