Correlation Between BANK MANDIRI and Media

Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI and Media 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 Media into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BANK MANDIRI and Media and Games, you can compare the effects of market volatilities on BANK MANDIRI and Media 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 Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and Media.

Diversification Opportunities for BANK MANDIRI and Media

-0.13

Correlation Coefficient

BANK MANDIRI  Media

Good diversification

The 3 months correlation between BANK and Media is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and Media and Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Media and Games 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 are associated (or correlated) with Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Media and Games has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and Media go up and down completely randomly.

Pair Corralation between BANK MANDIRI and Media

Assuming the 90 days trading horizon BANK MANDIRI is expected to generate 0.87 times more return on investment than Media. However, BANK MANDIRI is 1.15 times less risky than Media. It trades about -0.16 of its potential returns per unit of risk. Media and Games is currently generating about -0.28 per unit of risk. If you would invest  39.00  in BANK MANDIRI on September 15, 2024 and sell it today you would lose (4.00) from holding BANK MANDIRI or give up 10.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

BANK MANDIRI  vs.  Media and Games

BANK MANDIRI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BANK MANDIRI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Media and Games

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Media and Games are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Media is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with BANK MANDIRI and Media

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

The idea behind BANK MANDIRI and Media and Games 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.