Correlation Between KBC Groep and Bank Mandiri
Can any of the company-specific risk be diversified away by investing in both KBC Groep 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 KBC Groep and Bank Mandiri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KBC Groep NV and Bank Mandiri Persero, you can compare the effects of market volatilities on KBC Groep 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 KBC Groep with a short position of Bank Mandiri. Check out your portfolio center. Please also check ongoing floating volatility patterns of KBC Groep and Bank Mandiri.
Diversification Opportunities for KBC Groep and Bank Mandiri
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KBC and Bank is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding KBC Groep NV 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 KBC Groep 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 KBC Groep NV 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 KBC Groep i.e., KBC Groep and Bank Mandiri go up and down completely randomly.
Pair Corralation between KBC Groep and Bank Mandiri
Assuming the 90 days horizon KBC Groep is expected to generate 2.41 times less return on investment than Bank Mandiri. But when comparing it to its historical volatility, KBC Groep NV is 1.15 times less risky than Bank Mandiri. It trades about 0.06 of its potential returns per unit of risk. Bank Mandiri Persero is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,415 in Bank Mandiri Persero on November 2, 2024 and sell it today you would earn a total of 72.00 from holding Bank Mandiri Persero or generate 5.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KBC Groep NV vs. Bank Mandiri Persero
Performance |
| Timeline |
| KBC Groep NV |
| Bank Mandiri Persero |
KBC Groep and Bank Mandiri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KBC Groep and Bank Mandiri
The main advantage of trading using opposite KBC Groep and Bank Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KBC Groep 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.| KBC Groep vs. DBS Group Holdings | KBC Groep vs. United Overseas Bank | KBC Groep vs. Overseas Chinese Banking | KBC Groep vs. China Minsh |
| Bank Mandiri vs. Bank Rakyat | Bank Mandiri vs. Eurobank Ergasias Services | Bank Mandiri vs. Nedbank Group | Bank Mandiri vs. Standard Bank Group |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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