Correlation Between Coastal Carolina and Bank Mandiri

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

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

Diversification Opportunities for Coastal Carolina and Bank Mandiri

-0.74

Correlation Coefficient

Coastal Carolina  Bank Mandiri

Pay attention - limited upside

The 3 months correlation between Coastal and Bank is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Coastal Carolina Bancshares 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 Coastal Carolina 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 Coastal Carolina Bancshares 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 Coastal Carolina i.e., Coastal Carolina and Bank Mandiri go up and down completely randomly.

Pair Corralation between Coastal Carolina and Bank Mandiri

Given the investment horizon of 90 days Coastal Carolina Bancshares is expected to generate 0.14 times more return on investment than Bank Mandiri. However, Coastal Carolina Bancshares is 7.24 times less risky than Bank Mandiri. It trades about -0.36 of its potential returns per unit of risk. Bank Mandiri Persero is currently generating about -0.12 per unit of risk. If you would invest  1,120  in Coastal Carolina Bancshares on October 4, 2024 and sell it today you would lose (45.00) from holding Coastal Carolina Bancshares or give up 4.02% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Coastal Carolina Bancshares  vs.  Bank Mandiri Persero

Coastal Carolina Ban

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Coastal Carolina Bancshares are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, Coastal Carolina may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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 fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Coastal Carolina and Bank Mandiri

The main advantage of trading using opposite Coastal Carolina and Bank Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coastal Carolina 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 Coastal Carolina Bancshares 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.

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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..