Correlation Between Bank Mandiri and PUDO
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and PUDO 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 PUDO 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 PUDO Inc, you can compare the effects of market volatilities on Bank Mandiri and PUDO 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 PUDO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and PUDO.
Diversification Opportunities for Bank Mandiri and PUDO
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and PUDO is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and PUDO Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PUDO Inc 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 PUDO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PUDO Inc has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and PUDO go up and down completely randomly.
Pair Corralation between Bank Mandiri and PUDO
Assuming the 90 days horizon Bank Mandiri is expected to generate 90.78 times less return on investment than PUDO. But when comparing it to its historical volatility, Bank Mandiri Persero is 7.26 times less risky than PUDO. It trades about 0.02 of its potential returns per unit of risk. PUDO Inc is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 15.00 in PUDO Inc on September 3, 2024 and sell it today you would earn a total of 22.00 from holding PUDO Inc or generate 146.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Mandiri Persero vs. PUDO Inc
Performance |
| Timeline |
| Bank Mandiri Persero |
| PUDO Inc |
Bank Mandiri and PUDO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and PUDO
The main advantage of trading using opposite Bank Mandiri and PUDO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, PUDO 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 PUDO will offset losses from the drop in PUDO'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 |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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