Correlation Between Indocement Tunggal and Bank Mandiri
Can any of the company-specific risk be diversified away by investing in both Indocement Tunggal 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 Indocement Tunggal and Bank Mandiri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indocement Tunggal Prakarsa and Bank Mandiri Persero, you can compare the effects of market volatilities on Indocement Tunggal 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 Indocement Tunggal with a short position of Bank Mandiri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indocement Tunggal and Bank Mandiri.
Diversification Opportunities for Indocement Tunggal and Bank Mandiri
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Indocement and Bank is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Indocement Tunggal Prakarsa 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 Indocement Tunggal 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 Indocement Tunggal Prakarsa 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 Indocement Tunggal i.e., Indocement Tunggal and Bank Mandiri go up and down completely randomly.
Pair Corralation between Indocement Tunggal and Bank Mandiri
Assuming the 90 days trading horizon Indocement Tunggal Prakarsa is expected to under-perform the Bank Mandiri. In addition to that, Indocement Tunggal is 1.01 times more volatile than Bank Mandiri Persero. It trades about -0.07 of its total potential returns per unit of risk. Bank Mandiri Persero is currently generating about 0.0 per unit of volatility. If you would invest 522,953 in Bank Mandiri Persero on January 23, 2025 and sell it today you would lose (50,953) from holding Bank Mandiri Persero or give up 9.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indocement Tunggal Prakarsa vs. Bank Mandiri Persero
Performance |
| Timeline |
| Indocement Tunggal |
| Bank Mandiri Persero |
Indocement Tunggal and Bank Mandiri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indocement Tunggal and Bank Mandiri
The main advantage of trading using opposite Indocement Tunggal and Bank Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indocement Tunggal 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.| Indocement Tunggal vs. Betonjaya Manunggal Tbk | Indocement Tunggal vs. Lotte Chemical Titan | Indocement Tunggal vs. Saranacentral Bajatama Tbk | Indocement Tunggal vs. Pelat Timah Nusantara |
| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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