Correlation Between Bank Mandiri and Koc Holdings
Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Koc Holdings 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 Koc Holdings 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 Koc Holdings AS, you can compare the effects of market volatilities on Bank Mandiri and Koc Holdings 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 Koc Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Koc Holdings.
Diversification Opportunities for Bank Mandiri and Koc Holdings
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Koc is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Koc Holdings AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koc Holdings AS 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 Koc Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koc Holdings AS has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Koc Holdings go up and down completely randomly.
Pair Corralation between Bank Mandiri and Koc Holdings
Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the Koc Holdings. In addition to that, Bank Mandiri is 1.05 times more volatile than Koc Holdings AS. It trades about -0.22 of its total potential returns per unit of risk. Koc Holdings AS is currently generating about -0.06 per unit of volatility. If you would invest 2,253 in Koc Holdings AS on December 3, 2024 and sell it today you would lose (103.00) from holding Koc Holdings AS or give up 4.57% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 95.24% |
Values | Daily Returns |
Bank Mandiri Persero vs. Koc Holdings AS
Performance |
Timeline |
Bank Mandiri Persero |
Koc Holdings AS |
Bank Mandiri and Koc Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank Mandiri and Koc Holdings
The main advantage of trading using opposite Bank Mandiri and Koc Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Koc Holdings 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 Koc Holdings will offset losses from the drop in Koc Holdings' long position.Bank Mandiri vs. HDFC Bank Limited | Bank Mandiri vs. China Merchants Bank | Bank Mandiri vs. China Merchants Bank | Bank Mandiri vs. Fifth Third Bancorp |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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