Correlation Between Bank Mandiri and TKB Critical

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

Diversification Opportunities for Bank Mandiri and TKB Critical

0.65

Correlation Coefficient

Bank Mandiri  TKB Critical

Poor diversification

The 3 months correlation between Bank and TKB is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and TKB Critical Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TKB Critical Technologies 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 TKB Critical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TKB Critical Technologies has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and TKB Critical go up and down completely randomly.

Pair Corralation between Bank Mandiri and TKB Critical

If you would invest  1.10  in TKB Critical Technologies on September 16, 2024 and sell it today you would earn a total of  0.00  from holding TKB Critical Technologies or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	3.08%
Values	Daily Returns

Bank Mandiri Persero  vs.  TKB Critical Technologies

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 latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

TKB Critical Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TKB Critical Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, TKB Critical is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Bank Mandiri and TKB Critical

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

The idea behind Bank Mandiri Persero and TKB Critical Technologies 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.