Correlation Between Bank Mandiri and Goliath Film

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

Diversification Opportunities for Bank Mandiri and Goliath Film

0.42

Correlation Coefficient

Bank Mandiri  Goliath Film

Very weak diversification

The 3 months correlation between Bank and Goliath is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Goliath Film and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goliath Film 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 Goliath Film. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goliath Film has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Goliath Film go up and down completely randomly.

Pair Corralation between Bank Mandiri and Goliath Film

Assuming the 90 days horizon Bank Mandiri is expected to generate 7.45 times less return on investment than Goliath Film. But when comparing it to its historical volatility, Bank Mandiri Persero is 4.11 times less risky than Goliath Film. It trades about 0.02 of its potential returns per unit of risk. Goliath Film and is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  0.44  in Goliath Film and on October 1, 2024 and sell it today you would lose (0.06) from holding Goliath Film and or give up 13.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.58%
Values	Daily Returns

Bank Mandiri Persero  vs.  Goliath Film and

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.

Goliath Film

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Goliath Film and are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile primary indicators, Goliath Film demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bank Mandiri and Goliath Film

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

The idea behind Bank Mandiri Persero and Goliath Film and 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.