Correlation Between Central Pacific and Bank Mandiri
Can any of the company-specific risk be diversified away by investing in both Central Pacific 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 Central Pacific and Bank Mandiri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Central Pacific Financial and Bank Mandiri Persero, you can compare the effects of market volatilities on Central Pacific 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 Central Pacific with a short position of Bank Mandiri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Pacific and Bank Mandiri.
Diversification Opportunities for Central Pacific and Bank Mandiri
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Central and Bank is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Central Pacific Financial 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 Central Pacific 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 Central Pacific Financial 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 Central Pacific i.e., Central Pacific and Bank Mandiri go up and down completely randomly.
Pair Corralation between Central Pacific and Bank Mandiri
Considering the 90-day investment horizon Central Pacific is expected to generate 5.4 times less return on investment than Bank Mandiri. In addition to that, Central Pacific is 1.01 times more volatile than Bank Mandiri Persero. It trades about 0.04 of its total potential returns per unit of risk. Bank Mandiri Persero is currently generating about 0.23 per unit of volatility. If you would invest 1,379 in Bank Mandiri Persero on November 1, 2024 and sell it today you would earn a total of 125.00 from holding Bank Mandiri Persero or generate 9.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Central Pacific Financial vs. Bank Mandiri Persero
Performance |
| Timeline |
| Central Pacific Financial |
| Bank Mandiri Persero |
Central Pacific and Bank Mandiri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Pacific and Bank Mandiri
The main advantage of trading using opposite Central Pacific and Bank Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Pacific 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.| Central Pacific vs. Bank of Hawaii | Central Pacific vs. Territorial Bancorp | Central Pacific vs. First Bancorp | Central Pacific vs. Hancock Whitney Corp |
| Bank Mandiri vs. First Hawaiian | Bank Mandiri vs. Central Pacific Financial | Bank Mandiri vs. Territorial Bancorp | Bank Mandiri vs. Comerica |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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