Correlation Between Bank Mandiri and Man Wah
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Man Wah 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 Man Wah 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 Man Wah Holdings, you can compare the effects of market volatilities on Bank Mandiri and Man Wah 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 Man Wah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Man Wah.
Diversification Opportunities for Bank Mandiri and Man Wah
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Man is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Man Wah Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Man Wah Holdings 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 Man Wah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Man Wah Holdings has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Man Wah go up and down completely randomly.
Pair Corralation between Bank Mandiri and Man Wah
Assuming the 90 days horizon Bank Mandiri Persero is expected to generate 0.73 times more return on investment than Man Wah. However, Bank Mandiri Persero is 1.37 times less risky than Man Wah. It trades about 0.03 of its potential returns per unit of risk. Man Wah Holdings is currently generating about 0.0 per unit of risk. If you would invest 33.00 in Bank Mandiri Persero on August 27, 2024 and sell it today you would earn a total of 6.00 from holding Bank Mandiri Persero or generate 18.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 88.69% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Man Wah Holdings
Performance |
| Timeline |
| Bank Mandiri Persero |
| Man Wah Holdings |
Bank Mandiri and Man Wah Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Man Wah
The main advantage of trading using opposite Bank Mandiri and Man Wah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Man Wah 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 Man Wah will offset losses from the drop in Man Wah's long position.The idea behind Bank Mandiri Persero and Man Wah Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Man Wah vs. La Z Boy Incorporated | Man Wah vs. MasterBrand | Man Wah vs. MillerKnoll | Man Wah vs. Flexsteel Industries |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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