Correlation Between Bank Mandiri and Micropac Industries

Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Micropac Industries 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 Micropac Industries 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 Micropac Industries, you can compare the effects of market volatilities on Bank Mandiri and Micropac Industries 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 Micropac Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Micropac Industries.

Diversification Opportunities for Bank Mandiri and Micropac Industries

0.0

Correlation Coefficient

Bank Mandiri  Micropac Industries

Pay attention - limited upside

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

Pair Corralation between Bank Mandiri and Micropac Industries

If you would invest (100.00) in Micropac Industries on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Micropac Industries 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.  Micropac Industries

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.

Micropac Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Micropac Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Micropac Industries is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Bank Mandiri and Micropac Industries

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

The idea behind Bank Mandiri Persero and Micropac Industries 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.