Correlation Between Bank Mandiri and Alpine Banks

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

Diversification Opportunities for Bank Mandiri and Alpine Banks

-0.88

Correlation Coefficient

Bank Mandiri  Alpine Banks

Pay attention - limited upside

The 3 months correlation between Bank and Alpine is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Alpine Banks of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpine Banks 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 Alpine Banks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpine Banks has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Alpine Banks go up and down completely randomly.

Pair Corralation between Bank Mandiri and Alpine Banks

Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the Alpine Banks. In addition to that, Bank Mandiri is 5.48 times more volatile than Alpine Banks of. It trades about -0.36 of its total potential returns per unit of risk. Alpine Banks of is currently generating about 0.44 per unit of volatility. If you would invest  3,298  in Alpine Banks of on September 24, 2024 and sell it today you would earn a total of  126.00  from holding Alpine Banks of or generate 3.82% 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.  Alpine Banks of

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. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Alpine Banks

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Alpine Banks of are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady forward indicators, Alpine Banks sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bank Mandiri and Alpine Banks

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

The idea behind Bank Mandiri Persero and Alpine Banks of 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.