Correlation Between Bank Mandiri and Robex Resources

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

Diversification Opportunities for Bank Mandiri and Robex Resources

0.79

Correlation Coefficient

Bank Mandiri  Robex Resources

Poor diversification

The 3 months correlation between Bank and Robex is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Robex Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robex Resources 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 Robex Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Robex Resources has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Robex Resources go up and down completely randomly.

Pair Corralation between Bank Mandiri and Robex Resources

Assuming the 90 days horizon Bank Mandiri Persero is expected to generate 0.81 times more return on investment than Robex Resources. However, Bank Mandiri Persero is 1.23 times less risky than Robex Resources. It trades about 0.0 of its potential returns per unit of risk. Robex Resources is currently generating about -0.3 per unit of risk. If you would invest  1,614  in Bank Mandiri Persero on September 12, 2024 and sell it today you would lose (7.00) from holding Bank Mandiri Persero or give up 0.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Bank Mandiri Persero  vs.  Robex Resources

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 fragile 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.

Robex Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Robex Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental drivers remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Bank Mandiri and Robex Resources

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

The idea behind Bank Mandiri Persero and Robex Resources 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.