Correlation Between Bank Mandiri and Brinker International

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

Diversification Opportunities for Bank Mandiri and Brinker International

-0.86

Correlation Coefficient

Bank Mandiri  Brinker International

Pay attention - limited upside

The 3 months correlation between Bank and Brinker is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Brinker International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brinker International 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 Brinker International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brinker International has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Brinker International go up and down completely randomly.

Pair Corralation between Bank Mandiri and Brinker International

Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the Brinker International. In addition to that, Bank Mandiri is 1.67 times more volatile than Brinker International. It trades about -0.02 of its total potential returns per unit of risk. Brinker International is currently generating about 0.43 per unit of volatility. If you would invest  7,121  in Brinker International on September 1, 2024 and sell it today you would earn a total of  6,106  from holding Brinker International or generate 85.75% return on investment over 90 days.

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

Bank Mandiri Persero  vs.  Brinker International

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.

Brinker International

Risk-Adjusted Performance

33 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Brinker International are ranked lower than 33 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Brinker International unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bank Mandiri and Brinker International

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

The idea behind Bank Mandiri Persero and Brinker International 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.