Correlation Between Bank Mandiri and Pacific Financial
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Pacific Financial 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 Pacific Financial 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 Pacific Financial Corp, you can compare the effects of market volatilities on Bank Mandiri and Pacific Financial 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 Pacific Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Pacific Financial.
Diversification Opportunities for Bank Mandiri and Pacific Financial
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Pacific is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Pacific Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Financial Corp 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 Pacific Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Financial Corp has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Pacific Financial go up and down completely randomly.
Pair Corralation between Bank Mandiri and Pacific Financial
Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the Pacific Financial. In addition to that, Bank Mandiri is 1.72 times more volatile than Pacific Financial Corp. It trades about -0.16 of its total potential returns per unit of risk. Pacific Financial Corp is currently generating about 0.34 per unit of volatility. If you would invest 1,180 in Pacific Financial Corp on August 31, 2024 and sell it today you would earn a total of 120.00 from holding Pacific Financial Corp or generate 10.17% 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. Pacific Financial Corp
Performance |
| Timeline |
| Bank Mandiri Persero |
| Pacific Financial Corp |
Bank Mandiri and Pacific Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Mandiri and Pacific Financial
The main advantage of trading using opposite Bank Mandiri and Pacific Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Pacific Financial 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 Pacific Financial will offset losses from the drop in Pacific Financial's long position.| Bank Mandiri vs. Bank Rakyat | Bank Mandiri vs. Eurobank Ergasias Services | Bank Mandiri vs. Nedbank Group | Bank Mandiri vs. Standard Bank Group |
| Pacific Financial vs. Pioneer Bankcorp | Pacific Financial vs. Liberty Northwest Bancorp | Pacific Financial vs. First Community | Pacific Financial vs. Coeur dAlene Bancorp |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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