Correlation Between Bank Mandiri and Konica Minolta

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

Diversification Opportunities for Bank Mandiri and Konica Minolta

-0.7

Correlation Coefficient

Bank Mandiri  Konica Minolta

Excellent diversification

The 3 months correlation between Bank and Konica is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Konica Minolta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konica Minolta 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 Konica Minolta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konica Minolta has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Konica Minolta go up and down completely randomly.

Pair Corralation between Bank Mandiri and Konica Minolta

Assuming the 90 days horizon Bank Mandiri Persero is expected to generate 0.64 times more return on investment than Konica Minolta. However, Bank Mandiri Persero is 1.57 times less risky than Konica Minolta. It trades about 0.18 of its potential returns per unit of risk. Konica Minolta is currently generating about -0.22 per unit of risk. If you would invest  1,350  in Bank Mandiri Persero on October 20, 2024 and sell it today you would earn a total of  89.00  from holding Bank Mandiri Persero or generate 6.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

Bank Mandiri Persero  vs.  Konica Minolta

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. 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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Konica Minolta

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Konica Minolta are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Konica Minolta reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bank Mandiri and Konica Minolta

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

The idea behind Bank Mandiri Persero and Konica Minolta 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.