Correlation Between Kingdee International and BANK MANDIRI

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

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

Diversification Opportunities for Kingdee International and BANK MANDIRI

-0.28

Correlation Coefficient

Kingdee International  BANK MANDIRI

Very good diversification

The 3 months correlation between Kingdee and BANK is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software and BANK MANDIRI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK MANDIRI and Kingdee International 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 Kingdee International Software 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 Kingdee International i.e., Kingdee International and BANK MANDIRI go up and down completely randomly.

Pair Corralation between Kingdee International and BANK MANDIRI

Assuming the 90 days trading horizon Kingdee International is expected to generate 8.69 times less return on investment than BANK MANDIRI. In addition to that, Kingdee International is 2.02 times more volatile than BANK MANDIRI. It trades about 0.01 of its total potential returns per unit of risk. BANK MANDIRI is currently generating about 0.24 per unit of volatility. If you would invest  32.00  in BANK MANDIRI on October 25, 2024 and sell it today you would earn a total of  2.00  from holding BANK MANDIRI or generate 6.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.44%
Values	Daily Returns

Kingdee International Software  vs.  BANK MANDIRI

Kingdee International

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kingdee International Software are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, Kingdee International reported solid returns over the last few months and may actually be approaching a breakup point.

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 unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Kingdee International and BANK MANDIRI

The main advantage of trading using opposite Kingdee International and BANK MANDIRI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingdee International 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 Kingdee International Software 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.