Correlation Between Bank Mandiri and Yanaprima Hastapersada

Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Yanaprima Hastapersada 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 Yanaprima Hastapersada 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 Yanaprima Hastapersada Tbk, you can compare the effects of market volatilities on Bank Mandiri and Yanaprima Hastapersada 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 Yanaprima Hastapersada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Yanaprima Hastapersada.

Diversification Opportunities for Bank Mandiri and Yanaprima Hastapersada

-0.53

Correlation Coefficient

Bank Mandiri  Yanaprima Hastapersada

Excellent diversification

The 3 months correlation between Bank and Yanaprima is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Yanaprima Hastapersada Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yanaprima Hastapersada 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 Yanaprima Hastapersada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yanaprima Hastapersada has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Yanaprima Hastapersada go up and down completely randomly.

Pair Corralation between Bank Mandiri and Yanaprima Hastapersada

Assuming the 90 days trading horizon Bank Mandiri Persero is expected to generate 0.52 times more return on investment than Yanaprima Hastapersada. However, Bank Mandiri Persero is 1.91 times less risky than Yanaprima Hastapersada. It trades about 0.05 of its potential returns per unit of risk. Yanaprima Hastapersada Tbk is currently generating about -0.04 per unit of risk. If you would invest  446,916  in Bank Mandiri Persero on October 26, 2024 and sell it today you would earn a total of  178,084  from holding Bank Mandiri Persero or generate 39.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.79%
Values	Daily Returns

Bank Mandiri Persero  vs.  Yanaprima Hastapersada Tbk

Bank Mandiri Persero

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bank Mandiri Persero has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Yanaprima Hastapersada

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Yanaprima Hastapersada Tbk are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Yanaprima Hastapersada may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Bank Mandiri and Yanaprima Hastapersada

The main advantage of trading using opposite Bank Mandiri and Yanaprima Hastapersada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Yanaprima Hastapersada 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 Yanaprima Hastapersada will offset losses from the drop in Yanaprima Hastapersada's long position.

The idea behind Bank Mandiri Persero and Yanaprima Hastapersada Tbk pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.