Correlation Between Bank Tabungan and Mayora Indah

Can any of the company-specific risk be diversified away by investing in both Bank Tabungan and Mayora Indah 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 Tabungan and Mayora Indah into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bank Tabungan Pensiunan and Mayora Indah Tbk, you can compare the effects of market volatilities on Bank Tabungan and Mayora Indah 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 Tabungan with a short position of Mayora Indah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Tabungan and Mayora Indah.

Diversification Opportunities for Bank Tabungan and Mayora Indah

-0.19

Correlation Coefficient

Bank Tabungan  Mayora Indah

Good diversification

The 3 months correlation between Bank and Mayora is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Bank Tabungan Pensiunan and Mayora Indah Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mayora Indah Tbk and Bank Tabungan 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 Tabungan Pensiunan are associated (or correlated) with Mayora Indah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mayora Indah Tbk has no effect on the direction of Bank Tabungan i.e., Bank Tabungan and Mayora Indah go up and down completely randomly.

Pair Corralation between Bank Tabungan and Mayora Indah

Assuming the 90 days trading horizon Bank Tabungan Pensiunan is expected to generate 1.14 times more return on investment than Mayora Indah. However, Bank Tabungan is 1.14 times more volatile than Mayora Indah Tbk. It trades about 0.0 of its potential returns per unit of risk. Mayora Indah Tbk is currently generating about -0.22 per unit of risk. If you would invest  92,500  in Bank Tabungan Pensiunan on December 30, 2024 and sell it today you would lose (2,000) from holding Bank Tabungan Pensiunan or give up 2.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Bank Tabungan Pensiunan  vs.  Mayora Indah Tbk

Bank Tabungan Pensiunan

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bank Tabungan Pensiunan has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Bank Tabungan is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Mayora Indah Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mayora Indah Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Bank Tabungan and Mayora Indah

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

The idea behind Bank Tabungan Pensiunan and Mayora Indah 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.