Correlation Between Sumber Alfaria and Bank Mandiri
Can any of the company-specific risk be diversified away by investing in both Sumber Alfaria and Bank Mandiri 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 Sumber Alfaria and Bank Mandiri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sumber Alfaria Trijaya and Bank Mandiri Persero, you can compare the effects of market volatilities on Sumber Alfaria and Bank Mandiri 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 Sumber Alfaria with a short position of Bank Mandiri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumber Alfaria and Bank Mandiri.
Diversification Opportunities for Sumber Alfaria and Bank Mandiri
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sumber and Bank is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Sumber Alfaria Trijaya and Bank Mandiri Persero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Mandiri Persero and Sumber Alfaria 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 Sumber Alfaria Trijaya are associated (or correlated) with Bank Mandiri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Mandiri Persero has no effect on the direction of Sumber Alfaria i.e., Sumber Alfaria and Bank Mandiri go up and down completely randomly.
Pair Corralation between Sumber Alfaria and Bank Mandiri
Assuming the 90 days trading horizon Sumber Alfaria Trijaya is expected to generate 0.74 times more return on investment than Bank Mandiri. However, Sumber Alfaria Trijaya is 1.35 times less risky than Bank Mandiri. It trades about 0.07 of its potential returns per unit of risk. Bank Mandiri Persero is currently generating about -0.08 per unit of risk. If you would invest 269,000 in Sumber Alfaria Trijaya on February 26, 2024 and sell it today you would earn a total of 14,000 from holding Sumber Alfaria Trijaya or generate 5.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Sumber Alfaria Trijaya vs. Bank Mandiri Persero
Performance |
Timeline |
Sumber Alfaria Trijaya |
Bank Mandiri Persero |
Sumber Alfaria and Bank Mandiri Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sumber Alfaria and Bank Mandiri
The main advantage of trading using opposite Sumber Alfaria and Bank Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumber Alfaria position performs unexpectedly, Bank Mandiri 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 Bank Mandiri will offset losses from the drop in Bank Mandiri's long position.Sumber Alfaria vs. Darya Varia Laboratoria Tbk | Sumber Alfaria vs. Colorpak Indonesia Tbk | Sumber Alfaria vs. Multistrada Arah Sarana | Sumber Alfaria vs. PT MNC Energy |
Bank Mandiri vs. Bank Rakyat Indonesia | Bank Mandiri vs. Bank Central Asia | Bank Mandiri vs. Bank Negara Indonesia | Bank Mandiri vs. Astra International Tbk |
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 CEOs Directory module to screen CEOs from public companies around the world.
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