Correlation Between Bank Mandiri and Angkor Resources

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

Diversification Opportunities for Bank Mandiri and Angkor Resources

0.64

Correlation Coefficient

Bank Mandiri  Angkor Resources

Poor diversification

The 3 months correlation between Bank and Angkor is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Angkor Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angkor Resources Corp 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 Angkor Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Angkor Resources Corp has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Angkor Resources go up and down completely randomly.

Pair Corralation between Bank Mandiri and Angkor Resources

Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the Angkor Resources. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Mandiri Persero is 2.12 times less risky than Angkor Resources. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Angkor Resources Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  8.00  in Angkor Resources Corp on September 3, 2024 and sell it today you would lose (1.45) from holding Angkor Resources Corp or give up 18.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

Bank Mandiri Persero  vs.  Angkor Resources Corp

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 nearly stable basic indicators, Bank Mandiri is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Angkor Resources Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Angkor Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Angkor Resources is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Bank Mandiri and Angkor Resources

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

The idea behind Bank Mandiri Persero and Angkor Resources Corp 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.