Correlation Between Bank Mandiri and Indus Realty

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

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

Diversification Opportunities for Bank Mandiri and Indus Realty

0.0

Correlation Coefficient

Bank Mandiri  Indus Realty

Pay attention - limited upside

The 3 months correlation between Bank and Indus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Indus Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indus Realty Trust and Bank Mandiri 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 Bank Mandiri Persero are associated (or correlated) with Indus Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indus Realty Trust has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Indus Realty go up and down completely randomly.

Pair Corralation between Bank Mandiri and Indus Realty

If you would invest (100.00) in Indus Realty Trust on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Indus Realty Trust or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Bank Mandiri Persero  vs.  Indus Realty Trust

Bank Mandiri Persero

Risk-Adjusted Performance

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 nearly stable basic indicators, Bank Mandiri is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Indus Realty Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Indus Realty Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Indus Realty is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Bank Mandiri and Indus Realty

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

The idea behind Bank Mandiri Persero and Indus Realty Trust 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.