Correlation Between Peak Resources and BANK MANDIRI

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

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

Diversification Opportunities for Peak Resources and BANK MANDIRI

0.58

Correlation Coefficient

Peak Resources  BANK MANDIRI

Very weak diversification

The 3 months correlation between Peak and BANK is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Peak Resources Limited and BANK MANDIRI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK MANDIRI and Peak Resources 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 Peak Resources Limited 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 Peak Resources i.e., Peak Resources and BANK MANDIRI go up and down completely randomly.

Pair Corralation between Peak Resources and BANK MANDIRI

Assuming the 90 days horizon Peak Resources Limited is expected to generate 3.98 times more return on investment than BANK MANDIRI. However, Peak Resources is 3.98 times more volatile than BANK MANDIRI. It trades about 0.02 of its potential returns per unit of risk. BANK MANDIRI is currently generating about -0.19 per unit of risk. If you would invest  6.30  in Peak Resources Limited on December 28, 2024 and sell it today you would lose (0.55) from holding Peak Resources Limited or give up 8.73% of portfolio value over 90 days.

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

Peak Resources Limited  vs.  BANK MANDIRI

Peak Resources

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Peak Resources Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Peak Resources may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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 unsteady 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 Peak Resources and BANK MANDIRI

The main advantage of trading using opposite Peak Resources and BANK MANDIRI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peak Resources 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 Peak Resources Limited 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.