Correlation Between Bayan Resources and Bank Mandiri
Can any of the company-specific risk be diversified away by investing in both Bayan Resources 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 Bayan Resources and Bank Mandiri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bayan Resources Tbk and Bank Mandiri Persero, you can compare the effects of market volatilities on Bayan Resources 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 Bayan Resources with a short position of Bank Mandiri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayan Resources and Bank Mandiri.
Diversification Opportunities for Bayan Resources and Bank Mandiri
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bayan and Bank is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Bayan Resources 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 Bayan Resources 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 Bayan Resources 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 Bayan Resources i.e., Bayan Resources and Bank Mandiri go up and down completely randomly.
Pair Corralation between Bayan Resources and Bank Mandiri
Assuming the 90 days trading horizon Bayan Resources Tbk is expected to generate 0.62 times more return on investment than Bank Mandiri. However, Bayan Resources Tbk is 1.6 times less risky than Bank Mandiri. It trades about 0.38 of its potential returns per unit of risk. Bank Mandiri Persero is currently generating about -0.07 per unit of risk. If you would invest 1,717,500 in Bayan Resources Tbk on August 27, 2024 and sell it today you would earn a total of 180,000 from holding Bayan Resources Tbk or generate 10.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bayan Resources Tbk vs. Bank Mandiri Persero
Performance |
| Timeline |
| Bayan Resources Tbk |
| Bank Mandiri Persero |
Bayan Resources and Bank Mandiri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayan Resources and Bank Mandiri
The main advantage of trading using opposite Bayan Resources and Bank Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayan Resources 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.| Bayan Resources vs. Indo Tambangraya Megah | Bayan Resources vs. Indika Energy Tbk | Bayan Resources vs. Darma Henwa Tbk | Bayan Resources vs. Harum Energy Tbk |
| 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |