Correlation Between Environmmtl Tectonic and Bank Mandiri

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

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

Diversification Opportunities for Environmmtl Tectonic and Bank Mandiri

-0.59

Correlation Coefficient

Environmmtl Tectonic  Bank Mandiri

Excellent diversification

The 3 months correlation between Environmmtl and Bank is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Environmmtl Tectonic 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 Environmmtl Tectonic 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 Environmmtl Tectonic 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 Environmmtl Tectonic i.e., Environmmtl Tectonic and Bank Mandiri go up and down completely randomly.

Pair Corralation between Environmmtl Tectonic and Bank Mandiri

Given the investment horizon of 90 days Environmmtl Tectonic is expected to generate 0.87 times more return on investment than Bank Mandiri. However, Environmmtl Tectonic is 1.15 times less risky than Bank Mandiri. It trades about 0.06 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  189.00  in Environmmtl Tectonic on October 5, 2024 and sell it today you would earn a total of  6.00  from holding Environmmtl Tectonic or generate 3.17% return on investment over 90 days.

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

Environmmtl Tectonic  vs.  Bank Mandiri Persero

Environmmtl Tectonic

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Environmmtl Tectonic are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, Environmmtl Tectonic 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 Environmmtl Tectonic and Bank Mandiri

The main advantage of trading using opposite Environmmtl Tectonic and Bank Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Environmmtl Tectonic 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 Environmmtl Tectonic 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.