Correlation Between Sycamore Entmt and Bank Mandiri

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

By analyzing existing cross correlation between Sycamore Entmt Grp and Bank Mandiri Persero, you can compare the effects of market volatilities on Sycamore Entmt and Bank Mandiri 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 Sycamore Entmt with a short position of Bank Mandiri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sycamore Entmt and Bank Mandiri.

Diversification Opportunities for Sycamore Entmt and Bank Mandiri

-0.7

Correlation Coefficient

Sycamore Entmt  Bank Mandiri

Excellent diversification

The 3 months correlation between Sycamore and Bank is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Sycamore Entmt Grp and Bank Mandiri Persero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Mandiri Persero and Sycamore Entmt 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 Sycamore Entmt Grp are associated (or correlated) with Bank Mandiri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Mandiri Persero has no effect on the direction of Sycamore Entmt i.e., Sycamore Entmt and Bank Mandiri go up and down completely randomly.

Pair Corralation between Sycamore Entmt and Bank Mandiri

Given the investment horizon of 90 days Sycamore Entmt Grp is expected to generate 3.58 times more return on investment than Bank Mandiri. However, Sycamore Entmt is 3.58 times more volatile than Bank Mandiri Persero. It trades about 0.2 of its potential returns per unit of risk. Bank Mandiri Persero is currently generating about -0.04 per unit of risk. If you would invest  0.06  in Sycamore Entmt Grp on September 12, 2024 and sell it today you would earn a total of  0.14  from holding Sycamore Entmt Grp or generate 233.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Sycamore Entmt Grp  vs.  Bank Mandiri Persero

Sycamore Entmt Grp

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sycamore Entmt Grp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating technical and fundamental indicators, Sycamore Entmt demonstrated solid returns over the last few months and may actually be approaching a breakup point.

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. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Sycamore Entmt and Bank Mandiri

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

The idea behind Sycamore Entmt Grp and Bank Mandiri Persero 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.