Correlation Between Bank Mandiri and Bank of East
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Bank of East 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 Mandiri and Bank of East into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Mandiri Persero and Bank of East, you can compare the effects of market volatilities on Bank Mandiri and Bank of East 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 Mandiri with a short position of Bank of East. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Bank of East.
Diversification Opportunities for Bank Mandiri and Bank of East
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Bank is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Bank of East in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of East and Bank Mandiri 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 Mandiri Persero are associated (or correlated) with Bank of East. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of East has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Bank of East go up and down completely randomly.
Pair Corralation between Bank Mandiri and Bank of East
Assuming the 90 days horizon Bank Mandiri Persero is expected to generate 4.09 times more return on investment than Bank of East. However, Bank Mandiri is 4.09 times more volatile than Bank of East. It trades about 0.02 of its potential returns per unit of risk. Bank of East is currently generating about -0.1 per unit of risk. If you would invest 43.00 in Bank Mandiri Persero on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Bank Mandiri Persero or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Bank of East
Performance |
| Timeline |
| Bank Mandiri Persero |
| Bank of East |
Bank Mandiri and Bank of East Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Bank of East
The main advantage of trading using opposite Bank Mandiri and Bank of East positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Bank of East 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 of East will offset losses from the drop in Bank of East's long position.| Bank Mandiri vs. PT Bank Rakyat | Bank Mandiri vs. Piraeus Bank SA | Bank Mandiri vs. Eurobank Ergasias Services | Bank Mandiri vs. Zions Bancorporation |
| Bank of East vs. First Foundation | Bank of East vs. Metropolitan Bank Holding | Bank of East vs. MT Bank | Bank of East vs. Regions Financial |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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