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

Bank Mandiri  Koc Holdings

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

Bank Mandiri Persero

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bank Mandiri Persero has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Koc Holdings AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days Koc Holdings AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

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.

The idea behind Bank Mandiri Persero and Koc Holdings AS 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.