Correlation Between Bank BRISyariah and Bank Mandiri
Can any of the company-specific risk be diversified away by investing in both Bank BRISyariah and Bank Mandiri 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 BRISyariah and Bank Mandiri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank BRISyariah Tbk and Bank Mandiri Persero, you can compare the effects of market volatilities on Bank BRISyariah and Bank Mandiri 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 BRISyariah with a short position of Bank Mandiri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank BRISyariah and Bank Mandiri.
Diversification Opportunities for Bank BRISyariah and Bank Mandiri
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bank and Bank is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Bank BRISyariah Tbk and Bank Mandiri Persero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Mandiri Persero and Bank BRISyariah 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 BRISyariah Tbk are associated (or correlated) with Bank Mandiri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Mandiri Persero has no effect on the direction of Bank BRISyariah i.e., Bank BRISyariah and Bank Mandiri go up and down completely randomly.
Pair Corralation between Bank BRISyariah and Bank Mandiri
Assuming the 90 days trading horizon Bank BRISyariah Tbk is expected to generate 1.38 times more return on investment than Bank Mandiri. However, Bank BRISyariah is 1.38 times more volatile than Bank Mandiri Persero. It trades about 0.08 of its potential returns per unit of risk. Bank Mandiri Persero is currently generating about -0.13 per unit of risk. If you would invest 261,000 in Bank BRISyariah Tbk on September 2, 2024 and sell it today you would earn a total of 29,000 from holding Bank BRISyariah Tbk or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank BRISyariah Tbk vs. Bank Mandiri Persero
Performance |
| Timeline |
| Bank BRISyariah Tbk |
| Bank Mandiri Persero |
Bank BRISyariah and Bank Mandiri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank BRISyariah and Bank Mandiri
The main advantage of trading using opposite Bank BRISyariah and Bank Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank BRISyariah position performs unexpectedly, Bank Mandiri 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 Bank Mandiri will offset losses from the drop in Bank Mandiri's long position.| Bank BRISyariah vs. Ace Hardware Indonesia | Bank BRISyariah vs. Merdeka Copper Gold | Bank BRISyariah vs. Mitra Pinasthika Mustika | Bank BRISyariah vs. Jakarta Int Hotels |
| Bank Mandiri vs. Bank Rakyat Indonesia | Bank Mandiri vs. Bank Central Asia | Bank Mandiri vs. Bank Negara Indonesia | Bank Mandiri vs. Astra International Tbk |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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