Correlation Between Bank Mandiri and MBT Bancshares
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and MBT Bancshares 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 MBT Bancshares 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 MBT Bancshares, you can compare the effects of market volatilities on Bank Mandiri and MBT Bancshares 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 MBT Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and MBT Bancshares.
Diversification Opportunities for Bank Mandiri and MBT Bancshares
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and MBT is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and MBT Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MBT Bancshares 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 MBT Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MBT Bancshares has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and MBT Bancshares go up and down completely randomly.
Pair Corralation between Bank Mandiri and MBT Bancshares
Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the MBT Bancshares. In addition to that, Bank Mandiri is 7.13 times more volatile than MBT Bancshares. It trades about -0.03 of its total potential returns per unit of risk. MBT Bancshares is currently generating about 0.22 per unit of volatility. If you would invest 1,900 in MBT Bancshares on September 1, 2024 and sell it today you would earn a total of 55.00 from holding MBT Bancshares or generate 2.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Mandiri Persero vs. MBT Bancshares
Performance |
| Timeline |
| Bank Mandiri Persero |
| MBT Bancshares |
Bank Mandiri and MBT Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and MBT Bancshares
The main advantage of trading using opposite Bank Mandiri and MBT Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, MBT Bancshares 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 MBT Bancshares will offset losses from the drop in MBT Bancshares' long position.| Bank Mandiri vs. Piraeus Bank SA | Bank Mandiri vs. Turkiye Garanti Bankasi | Bank Mandiri vs. Delhi Bank Corp | Bank Mandiri vs. Uwharrie Capital Corp |
| MBT Bancshares vs. Huntington Bancshares Incorporated | MBT Bancshares vs. KeyCorp | MBT Bancshares vs. Bank of Idaho | MBT Bancshares vs. Citizens Financial Corp |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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