Correlation Between SOFI TECHNOLOGIES and BANK MANDIRI

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

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

Diversification Opportunities for SOFI TECHNOLOGIES and BANK MANDIRI

0.76

Correlation Coefficient

SOFI TECHNOLOGIES  BANK MANDIRI

Poor diversification

The 3 months correlation between SOFI and BANK is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding SOFI TECHNOLOGIES and BANK MANDIRI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK MANDIRI and SOFI TECHNOLOGIES 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 SOFI TECHNOLOGIES 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 has no effect on the direction of SOFI TECHNOLOGIES i.e., SOFI TECHNOLOGIES and BANK MANDIRI go up and down completely randomly.

Pair Corralation between SOFI TECHNOLOGIES and BANK MANDIRI

Assuming the 90 days horizon SOFI TECHNOLOGIES is expected to under-perform the BANK MANDIRI. But the stock apears to be less risky and, when comparing its historical volatility, SOFI TECHNOLOGIES is 1.45 times less risky than BANK MANDIRI. The stock trades about -0.1 of its potential returns per unit of risk. The BANK MANDIRI is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  30.00  in BANK MANDIRI on December 20, 2024 and sell it today you would lose (8.00) from holding BANK MANDIRI or give up 26.67% of portfolio value over 90 days.

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

SOFI TECHNOLOGIES  vs.  BANK MANDIRI

SOFI TECHNOLOGIES

Risk-Adjusted Performance

Very Weak

Over the last 90 days SOFI TECHNOLOGIES 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 basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

BANK MANDIRI

Risk-Adjusted Performance

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 fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with SOFI TECHNOLOGIES and BANK MANDIRI

The main advantage of trading using opposite SOFI TECHNOLOGIES and BANK MANDIRI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOFI TECHNOLOGIES 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 SOFI TECHNOLOGIES and BANK MANDIRI 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.