Correlation Between Bank Mandiri and Builders FirstSource

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

Diversification Opportunities for Bank Mandiri and Builders FirstSource

-0.66

Correlation Coefficient

Bank Mandiri  Builders FirstSource

Excellent diversification

The 3 months correlation between Bank and Builders is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Builders FirstSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Builders FirstSource 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 Builders FirstSource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Builders FirstSource has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Builders FirstSource go up and down completely randomly.

Pair Corralation between Bank Mandiri and Builders FirstSource

Assuming the 90 days horizon Bank Mandiri Persero is expected to generate 0.7 times more return on investment than Builders FirstSource. However, Bank Mandiri Persero is 1.43 times less risky than Builders FirstSource. It trades about 0.06 of its potential returns per unit of risk. Builders FirstSource is currently generating about -0.11 per unit of risk. If you would invest  1,096  in Bank Mandiri Persero on September 17, 2025 and sell it today you would earn a total of  61.00  from holding Bank Mandiri Persero or generate 5.57% return on investment over 90 days.

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

Bank Mandiri Persero  vs.  Builders FirstSource

Bank Mandiri Persero

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Bank Mandiri Persero are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Bank Mandiri may actually be approaching a critical reversion point that can send shares even higher in January 2026.

Builders FirstSource

Risk-Adjusted Performance

Weakest

Over the last 90 days Builders FirstSource has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in January 2026. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Bank Mandiri and Builders FirstSource

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

The idea behind Bank Mandiri Persero and Builders FirstSource 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.