Correlation Between BANK MANDIRI and Perusahaan Perseroan
Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI and Perusahaan Perseroan 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 Perusahaan Perseroan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK MANDIRI and Perusahaan Perseroan PT, you can compare the effects of market volatilities on BANK MANDIRI and Perusahaan Perseroan 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 Perusahaan Perseroan. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and Perusahaan Perseroan.
Diversification Opportunities for BANK MANDIRI and Perusahaan Perseroan
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BANK and Perusahaan is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and Perusahaan Perseroan PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perusahaan Perseroan 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 Perusahaan Perseroan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perusahaan Perseroan has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and Perusahaan Perseroan go up and down completely randomly.
Pair Corralation between BANK MANDIRI and Perusahaan Perseroan
Assuming the 90 days trading horizon BANK MANDIRI is expected to generate 1.04 times more return on investment than Perusahaan Perseroan. However, BANK MANDIRI is 1.04 times more volatile than Perusahaan Perseroan PT. It trades about 0.04 of its potential returns per unit of risk. Perusahaan Perseroan PT is currently generating about 0.01 per unit of risk. If you would invest 30.00 in BANK MANDIRI on September 1, 2024 and sell it today you would earn a total of 3.00 from holding BANK MANDIRI or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK MANDIRI vs. Perusahaan Perseroan PT
Performance |
| Timeline |
| BANK MANDIRI |
| Perusahaan Perseroan |
BANK MANDIRI and Perusahaan Perseroan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK MANDIRI and Perusahaan Perseroan
The main advantage of trading using opposite BANK MANDIRI and Perusahaan Perseroan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK MANDIRI position performs unexpectedly, Perusahaan Perseroan 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 Perusahaan Perseroan will offset losses from the drop in Perusahaan Perseroan's long position.| BANK MANDIRI vs. KRISPY KREME DL 01 | BANK MANDIRI vs. Goosehead Insurance | BANK MANDIRI vs. Liberty Broadband | BANK MANDIRI vs. Verizon Communications |
| Perusahaan Perseroan vs. ATT Inc | Perusahaan Perseroan vs. Deutsche Telekom AG | Perusahaan Perseroan vs. Superior Plus Corp | Perusahaan Perseroan vs. NMI Holdings |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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