Correlation Between Bank Mandiri and Otc Markets

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

Diversification Opportunities for Bank Mandiri and Otc Markets

-0.93

Correlation Coefficient

Bank Mandiri  Otc Markets

Pay attention - limited upside

The 3 months correlation between Bank and Otc is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Otc Markets Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Otc Markets Group 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 Otc Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Otc Markets Group has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Otc Markets go up and down completely randomly.

Pair Corralation between Bank Mandiri and Otc Markets

Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the Otc Markets. In addition to that, Bank Mandiri is 1.23 times more volatile than Otc Markets Group. It trades about -0.2 of its total potential returns per unit of risk. Otc Markets Group is currently generating about 0.16 per unit of volatility. If you would invest  4,564  in Otc Markets Group on September 19, 2024 and sell it today you would earn a total of  776.00  from holding Otc Markets Group or generate 17.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Bank Mandiri Persero  vs.  Otc Markets Group

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.

Otc Markets Group

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Otc Markets Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Otc Markets displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bank Mandiri and Otc Markets

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

The idea behind Bank Mandiri Persero and Otc Markets Group 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.

Check out your portfolio center.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.