Correlation Between Bank Mandiri and Powerbridge Technologies

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

Diversification Opportunities for Bank Mandiri and Powerbridge Technologies

0.77

Correlation Coefficient

Bank Mandiri  Powerbridge Technologies

Poor diversification

The 3 months correlation between Bank and Powerbridge is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Powerbridge Technologies Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powerbridge Technologies 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 Powerbridge Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powerbridge Technologies has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Powerbridge Technologies go up and down completely randomly.

Pair Corralation between Bank Mandiri and Powerbridge Technologies

Assuming the 90 days horizon Bank Mandiri is expected to generate 6.3 times less return on investment than Powerbridge Technologies. But when comparing it to its historical volatility, Bank Mandiri Persero is 5.93 times less risky than Powerbridge Technologies. It trades about 0.06 of its potential returns per unit of risk. Powerbridge Technologies Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  330.00  in Powerbridge Technologies Co on September 25, 2024 and sell it today you would lose (300.00) from holding Powerbridge Technologies Co or give up 90.91% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	30.82%
Values	Daily Returns

Bank Mandiri Persero  vs.  Powerbridge Technologies Co

Bank Mandiri Persero

Risk-Adjusted Performance

0 of 100

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 unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Powerbridge Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Bank Mandiri and Powerbridge Technologies

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

The idea behind Bank Mandiri Persero and Powerbridge Technologies Co 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.