Correlation Between BANK MANDIRI and PetMed Express

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

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

Diversification Opportunities for BANK MANDIRI and PetMed Express

-0.78

Correlation Coefficient

BANK MANDIRI  PetMed Express

Pay attention - limited upside

The 3 months correlation between BANK and PetMed is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and PetMed Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetMed Express 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 PetMed Express. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PetMed Express has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and PetMed Express go up and down completely randomly.

Pair Corralation between BANK MANDIRI and PetMed Express

Assuming the 90 days trading horizon BANK MANDIRI is expected to under-perform the PetMed Express. But the stock apears to be less risky and, when comparing its historical volatility, BANK MANDIRI is 2.57 times less risky than PetMed Express. The stock trades about -0.06 of its potential returns per unit of risk. The PetMed Express is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  313.00  in PetMed Express on September 13, 2024 and sell it today you would earn a total of  313.00  from holding PetMed Express or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

BANK MANDIRI  vs.  PetMed Express

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.

PetMed Express

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in PetMed Express are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PetMed Express reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BANK MANDIRI and PetMed Express

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

The idea behind BANK MANDIRI and PetMed Express 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 Transaction History module to view history of all your transactions and understand their impact on performance.