Correlation Between Bank Mandiri and Protech Mitra
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Protech Mitra 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 Protech Mitra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Mandiri Persero and Protech Mitra Perkasa, you can compare the effects of market volatilities on Bank Mandiri and Protech Mitra 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 Protech Mitra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Protech Mitra.
Diversification Opportunities for Bank Mandiri and Protech Mitra
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and Protech is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Protech Mitra Perkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protech Mitra Perkasa 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 Persero are associated (or correlated) with Protech Mitra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protech Mitra Perkasa has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Protech Mitra go up and down completely randomly.
Pair Corralation between Bank Mandiri and Protech Mitra
Assuming the 90 days trading horizon Bank Mandiri Persero is expected to under-perform the Protech Mitra. But the stock apears to be less risky and, when comparing its historical volatility, Bank Mandiri Persero is 1.14 times less risky than Protech Mitra. The stock trades about -0.17 of its potential returns per unit of risk. The Protech Mitra Perkasa is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 14,100 in Protech Mitra Perkasa on December 1, 2024 and sell it today you would lose (1,500) from holding Protech Mitra Perkasa or give up 10.64% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Bank Mandiri Persero vs. Protech Mitra Perkasa
Performance |
Timeline |
Bank Mandiri Persero |
Protech Mitra Perkasa |
Bank Mandiri and Protech Mitra Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank Mandiri and Protech Mitra
The main advantage of trading using opposite Bank Mandiri and Protech Mitra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Protech Mitra 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 Protech Mitra will offset losses from the drop in Protech Mitra's long position.Bank Mandiri vs. Bank Rakyat Indonesia | Bank Mandiri vs. Bank Central Asia | Bank Mandiri vs. Bank Negara Indonesia | Bank Mandiri vs. Astra International Tbk |
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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