Correlation Between PSB Holdings and Bank Mandiri
Can any of the company-specific risk be diversified away by investing in both PSB Holdings and Bank Mandiri 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 PSB Holdings and Bank Mandiri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PSB Holdings and Bank Mandiri Persero, you can compare the effects of market volatilities on PSB Holdings and Bank Mandiri 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 PSB Holdings with a short position of Bank Mandiri. Check out your portfolio center. Please also check ongoing floating volatility patterns of PSB Holdings and Bank Mandiri.
Diversification Opportunities for PSB Holdings and Bank Mandiri
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PSB and Bank is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding PSB Holdings and Bank Mandiri Persero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Mandiri Persero and PSB Holdings 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 PSB Holdings are associated (or correlated) with Bank Mandiri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Mandiri Persero has no effect on the direction of PSB Holdings i.e., PSB Holdings and Bank Mandiri go up and down completely randomly.
Pair Corralation between PSB Holdings and Bank Mandiri
Given the investment horizon of 90 days PSB Holdings is expected to generate 8.26 times less return on investment than Bank Mandiri. But when comparing it to its historical volatility, PSB Holdings is 6.21 times less risky than Bank Mandiri. It trades about 0.04 of its potential returns per unit of risk. Bank Mandiri Persero is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 31.00 in Bank Mandiri Persero on August 27, 2024 and sell it today you would earn a total of 8.00 from holding Bank Mandiri Persero or generate 25.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 91.11% |
| Values | Daily Returns |
PSB Holdings vs. Bank Mandiri Persero
Performance |
| Timeline |
| PSB Holdings |
| Bank Mandiri Persero |
PSB Holdings and Bank Mandiri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PSB Holdings and Bank Mandiri
The main advantage of trading using opposite PSB Holdings and Bank Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PSB Holdings position performs unexpectedly, Bank Mandiri 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 Bank Mandiri will offset losses from the drop in Bank Mandiri's long position.| PSB Holdings vs. Eagle Financial Services | PSB Holdings vs. National Capital Bank | PSB Holdings vs. Community Heritage Financial | PSB Holdings vs. Citizens Financial Corp |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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