Correlation Between Standard Bank and Bank Mandiri
Can any of the company-specific risk be diversified away by investing in both Standard Bank 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 Standard Bank and Bank Mandiri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Standard Bank Group and Bank Mandiri Persero, you can compare the effects of market volatilities on Standard Bank 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 Standard Bank with a short position of Bank Mandiri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Standard Bank and Bank Mandiri.
Diversification Opportunities for Standard Bank and Bank Mandiri
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Standard and Bank is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Standard Bank Group 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 Standard Bank 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 Standard Bank Group 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 Standard Bank i.e., Standard Bank and Bank Mandiri go up and down completely randomly.
Pair Corralation between Standard Bank and Bank Mandiri
Assuming the 90 days horizon Standard Bank Group is expected to under-perform the Bank Mandiri. But the pink sheet apears to be less risky and, when comparing its historical volatility, Standard Bank Group is 1.04 times less risky than Bank Mandiri. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Bank Mandiri Persero is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,415 in Bank Mandiri Persero on November 3, 2024 and sell it today you would earn a total of 35.00 from holding Bank Mandiri Persero or generate 2.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Standard Bank Group vs. Bank Mandiri Persero
Performance |
| Timeline |
| Standard Bank Group |
| Bank Mandiri Persero |
Standard Bank and Bank Mandiri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Standard Bank and Bank Mandiri
The main advantage of trading using opposite Standard Bank and Bank Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Standard Bank 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.| Standard Bank vs. Bank Central Asia | Standard Bank vs. Nedbank Group | Standard Bank vs. Kasikornbank Public Co | Standard Bank vs. KBC Groep NV |
| Bank Mandiri vs. Bank Rakyat | Bank Mandiri vs. Eurobank Ergasias Services | Bank Mandiri vs. Nedbank Group | Bank Mandiri vs. Standard Bank Group |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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