Correlation Between Bank Mandiri and Pyxis Tankers

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

Diversification Opportunities for Bank Mandiri and Pyxis Tankers

-0.91
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Bank and Pyxis is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Pyxis Tankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pyxis Tankers 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 Pyxis Tankers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pyxis Tankers has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Pyxis Tankers go up and down completely randomly.

Pair Corralation between Bank Mandiri and Pyxis Tankers

Assuming the 90 days horizon Bank Mandiri is expected to generate 1.61 times less return on investment than Pyxis Tankers. In addition to that, Bank Mandiri is 3.84 times more volatile than Pyxis Tankers. It trades about 0.02 of its total potential returns per unit of risk. Pyxis Tankers is currently generating about 0.1 per unit of volatility. If you would invest  2,254  in Pyxis Tankers on September 13, 2024 and sell it today you would earn a total of  243.00  from holding Pyxis Tankers or generate 10.78% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy87.5%
ValuesDaily Returns

Bank Mandiri Persero  vs.  Pyxis Tankers

 Performance 
       Timeline  
Bank Mandiri Persero 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
Pyxis Tankers 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
OK
Over the last 90 days Pyxis Tankers has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Pyxis Tankers is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Bank Mandiri and Pyxis Tankers Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bank Mandiri and Pyxis Tankers

The main advantage of trading using opposite Bank Mandiri and Pyxis Tankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Pyxis Tankers 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 Pyxis Tankers will offset losses from the drop in Pyxis Tankers' long position.
The idea behind Bank Mandiri Persero and Pyxis Tankers 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

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