Correlation Between Telkom Indonesia and Bank Mandiri
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia 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 Telkom Indonesia and Bank Mandiri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telkom Indonesia Tbk and Bank Mandiri Persero, you can compare the effects of market volatilities on Telkom Indonesia 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 Telkom Indonesia with a short position of Bank Mandiri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Bank Mandiri.
Diversification Opportunities for Telkom Indonesia and Bank Mandiri
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Telkom and Bank is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk 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 Telkom Indonesia 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 Telkom Indonesia Tbk 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 Telkom Indonesia i.e., Telkom Indonesia and Bank Mandiri go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Bank Mandiri
Assuming the 90 days horizon Telkom Indonesia Tbk is expected to under-perform the Bank Mandiri. But the pink sheet apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 1.08 times less risky than Bank Mandiri. The pink sheet trades about -0.03 of its potential returns per unit of risk. The Bank Mandiri Persero is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 44.00 in Bank Mandiri Persero on September 1, 2024 and sell it today you would lose (1.00) from holding Bank Mandiri Persero or give up 2.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 87.57% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Bank Mandiri Persero
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Bank Mandiri Persero |
Telkom Indonesia and Bank Mandiri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Bank Mandiri
The main advantage of trading using opposite Telkom Indonesia and Bank Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia 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.| Telkom Indonesia vs. Verizon Communications | Telkom Indonesia vs. ATT Inc | Telkom Indonesia vs. Comcast Corp |
| Bank Mandiri vs. Piraeus Bank SA | Bank Mandiri vs. Turkiye Garanti Bankasi | Bank Mandiri vs. Delhi Bank Corp | Bank Mandiri vs. Uwharrie Capital 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |