Correlation Between Bank Mandiri and Asuransi Jasa

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

Diversification Opportunities for Bank Mandiri and Asuransi Jasa

-0.57

Correlation Coefficient

Bank Mandiri  Asuransi Jasa

Excellent diversification

The 3 months correlation between Bank and Asuransi is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Asuransi Jasa Tania in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asuransi Jasa Tania 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 Asuransi Jasa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asuransi Jasa Tania has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Asuransi Jasa go up and down completely randomly.

Pair Corralation between Bank Mandiri and Asuransi Jasa

Assuming the 90 days trading horizon Bank Mandiri Persero is expected to under-perform the Asuransi Jasa. In addition to that, Bank Mandiri is 2.3 times more volatile than Asuransi Jasa Tania. It trades about -0.14 of its total potential returns per unit of risk. Asuransi Jasa Tania is currently generating about 0.1 per unit of volatility. If you would invest  11,500  in Asuransi Jasa Tania on February 3, 2024 and sell it today you would earn a total of  200.00  from holding Asuransi Jasa Tania or generate 1.74% return on investment over 90 days.

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

Bank Mandiri Persero  vs.  Asuransi Jasa Tania

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. Despite quite persistent basic indicators, Bank Mandiri is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Asuransi Jasa Tania

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Asuransi Jasa Tania are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Asuransi Jasa is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Bank Mandiri and Asuransi Jasa

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

The idea behind Bank Mandiri Persero and Asuransi Jasa Tania 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.