Correlation Between Bank Mandiri and Walkme

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

Diversification Opportunities for Bank Mandiri and Walkme

-0.34

Correlation Coefficient

Bank Mandiri  Walkme

Very good diversification

The 3 months correlation between Bank and Walkme is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Walkme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walkme 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 Walkme. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walkme has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Walkme go up and down completely randomly.

Pair Corralation between Bank Mandiri and Walkme

Assuming the 90 days horizon Bank Mandiri is expected to generate 2.28 times less return on investment than Walkme. But when comparing it to its historical volatility, Bank Mandiri Persero is 1.8 times less risky than Walkme. It trades about 0.03 of its potential returns per unit of risk. Walkme is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,070  in Walkme on September 26, 2024 and sell it today you would earn a total of  325.00  from holding Walkme or generate 30.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	85.69%
Values	Daily Returns

Bank Mandiri Persero  vs.  Walkme

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.

Walkme

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Walkme has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Walkme is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Bank Mandiri and Walkme

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

The idea behind Bank Mandiri Persero and Walkme 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.