Correlation Between Bank Mandiri and Victoria Insurance
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Victoria Insurance 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 Victoria Insurance 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 Victoria Insurance Tbk, you can compare the effects of market volatilities on Bank Mandiri and Victoria Insurance 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 Victoria Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Victoria Insurance.
Diversification Opportunities for Bank Mandiri and Victoria Insurance
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Victoria is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Victoria Insurance Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victoria Insurance Tbk 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 Victoria Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victoria Insurance Tbk has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Victoria Insurance go up and down completely randomly.
Pair Corralation between Bank Mandiri and Victoria Insurance
Assuming the 90 days trading horizon Bank Mandiri Persero is expected to under-perform the Victoria Insurance. In addition to that, Bank Mandiri is 2.08 times more volatile than Victoria Insurance Tbk. It trades about -0.38 of its total potential returns per unit of risk. Victoria Insurance Tbk is currently generating about 0.08 per unit of volatility. If you would invest 10,400 in Victoria Insurance Tbk on November 28, 2024 and sell it today you would earn a total of 200.00 from holding Victoria Insurance Tbk or generate 1.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Victoria Insurance Tbk
Performance |
| Timeline |
| Bank Mandiri Persero |
| Victoria Insurance Tbk |
Bank Mandiri and Victoria Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Victoria Insurance
The main advantage of trading using opposite Bank Mandiri and Victoria Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Victoria Insurance 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 Victoria Insurance will offset losses from the drop in Victoria Insurance'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 |
| Victoria Insurance vs. Victoria Investama Tbk | Victoria Insurance vs. Verena Multi Finance | Victoria Insurance vs. Asuransi Harta Aman | Victoria Insurance vs. Trust Finance 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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