Correlation Between Bank Mandiri and Ricoh Company
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Ricoh Company 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 Ricoh Company 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 Ricoh Company, you can compare the effects of market volatilities on Bank Mandiri and Ricoh Company 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 Ricoh Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Ricoh Company.
Diversification Opportunities for Bank Mandiri and Ricoh Company
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Ricoh is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Ricoh Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ricoh Company 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 Ricoh Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ricoh Company has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Ricoh Company go up and down completely randomly.
Pair Corralation between Bank Mandiri and Ricoh Company
Assuming the 90 days horizon Bank Mandiri Persero is expected to generate 6.34 times more return on investment than Ricoh Company. However, Bank Mandiri is 6.34 times more volatile than Ricoh Company. It trades about 0.06 of its potential returns per unit of risk. Ricoh Company is currently generating about 0.05 per unit of risk. If you would invest 30.00 in Bank Mandiri Persero on September 3, 2024 and sell it today you would earn a total of 13.00 from holding Bank Mandiri Persero or generate 43.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 93.35% |
| Values | Daily Returns |
Bank Mandiri Persero vs. Ricoh Company
Performance |
| Timeline |
| Bank Mandiri Persero |
| Ricoh Company |
Bank Mandiri and Ricoh Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Ricoh Company
The main advantage of trading using opposite Bank Mandiri and Ricoh Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Ricoh Company 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 Ricoh Company will offset losses from the drop in Ricoh Company'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 |
| Ricoh Company vs. Konica Minolta | Ricoh Company vs. Seiko Epson Corp | Ricoh Company vs. Fujitsu Ltd ADR | Ricoh Company vs. Kawasaki Heavy 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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