Correlation Between Palladyne and PT Bank

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

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

Diversification Opportunities for Palladyne and PT Bank

0.3

Correlation Coefficient

Palladyne  PT Bank

Weak diversification

The 3 months correlation between Palladyne and PQ9 is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Palladyne AI Corp and PT Bank Mandiri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Mandiri and Palladyne 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 Palladyne AI Corp are associated (or correlated) with PT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Mandiri has no effect on the direction of Palladyne i.e., Palladyne and PT Bank go up and down completely randomly.

Pair Corralation between Palladyne and PT Bank

Given the investment horizon of 90 days Palladyne AI Corp is expected to under-perform the PT Bank. In addition to that, Palladyne is 1.37 times more volatile than PT Bank Mandiri. It trades about -0.07 of its total potential returns per unit of risk. PT Bank Mandiri is currently generating about 0.02 per unit of volatility. If you would invest  32.00  in PT Bank Mandiri on December 27, 2024 and sell it today you would lose (1.00) from holding PT Bank Mandiri or give up 3.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Palladyne AI Corp  vs.  PT Bank Mandiri

Palladyne AI Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Palladyne AI Corp 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 very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

PT Bank Mandiri

Risk-Adjusted Performance

Weak

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

Pair Trading with Palladyne and PT Bank

The main advantage of trading using opposite Palladyne and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palladyne position performs unexpectedly, PT Bank 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 PT Bank will offset losses from the drop in PT Bank's long position.

The idea behind Palladyne AI Corp and PT 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.

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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.