Correlation Between Bank Mandiri and Calbee

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

Diversification Opportunities for Bank Mandiri and Calbee

-0.69

Correlation Coefficient

Bank Mandiri  Calbee

Excellent diversification

The 3 months correlation between Bank and Calbee is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Calbee Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calbee Inc 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 Calbee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calbee Inc has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Calbee go up and down completely randomly.

Pair Corralation between Bank Mandiri and Calbee

Assuming the 90 days horizon Bank Mandiri Persero is expected to generate 0.07 times more return on investment than Calbee. However, Bank Mandiri Persero is 13.5 times less risky than Calbee. It trades about 0.03 of its potential returns per unit of risk. Calbee Inc is currently generating about -0.11 per unit of risk. If you would invest  1,210  in Bank Mandiri Persero on September 19, 2024 and sell it today you would earn a total of  284.00  from holding Bank Mandiri Persero or generate 23.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	28.69%
Values	Daily Returns

Bank Mandiri Persero  vs.  Calbee Inc

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 weak 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.

Calbee Inc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Bank Mandiri and Calbee

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

The idea behind Bank Mandiri Persero and Calbee Inc 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.