Correlation Between BANK MANDIRI and PT Bank
Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI and PT Bank 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 PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK MANDIRI and PT Bank Mandiri, you can compare the effects of market volatilities on BANK MANDIRI and PT Bank 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 PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and PT Bank.
Diversification Opportunities for BANK MANDIRI and PT Bank
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BANK and PQ9 is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and PT Bank Mandiri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Mandiri 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 are associated (or correlated) with PT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Mandiri has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and PT Bank go up and down completely randomly.
Pair Corralation between BANK MANDIRI and PT Bank
Assuming the 90 days trading horizon BANK MANDIRI is expected to generate 1.21 times less return on investment than PT Bank. But when comparing it to its historical volatility, BANK MANDIRI is 2.77 times less risky than PT Bank. It trades about 0.09 of its potential returns per unit of risk. PT Bank Mandiri is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 32.00 in PT Bank Mandiri on September 1, 2024 and sell it today you would earn a total of 3.00 from holding PT Bank Mandiri or generate 9.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK MANDIRI vs. PT Bank Mandiri
Performance |
| Timeline |
| BANK MANDIRI |
| PT Bank Mandiri |
BANK MANDIRI and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK MANDIRI and PT Bank
The main advantage of trading using opposite BANK MANDIRI and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK MANDIRI position performs unexpectedly, PT Bank 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 PT Bank will offset losses from the drop in PT Bank's long position.| BANK MANDIRI vs. SIVERS SEMICONDUCTORS AB | BANK MANDIRI vs. Darden Restaurants | BANK MANDIRI vs. Reliance Steel Aluminum | BANK MANDIRI vs. Q2M Managementberatung AG |
| PT Bank vs. CODERE ONLINE LUX | PT Bank vs. Sumitomo Chemical | PT Bank vs. British American Tobacco | PT Bank vs. TIANDE CHEMICAL |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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