Correlation Between Bank Mandiri and PacifiCorp

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

Diversification Opportunities for Bank Mandiri and PacifiCorp

-0.4

Correlation Coefficient

Bank Mandiri  PacifiCorp

Very good diversification

The 3 months correlation between Bank and PacifiCorp is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and PacifiCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PacifiCorp 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 PacifiCorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PacifiCorp has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and PacifiCorp go up and down completely randomly.

Pair Corralation between Bank Mandiri and PacifiCorp

Assuming the 90 days horizon Bank Mandiri Persero is expected to generate 0.35 times more return on investment than PacifiCorp. However, Bank Mandiri Persero is 2.87 times less risky than PacifiCorp. It trades about 0.02 of its potential returns per unit of risk. PacifiCorp is currently generating about -0.05 per unit of risk. If you would invest  30.00  in Bank Mandiri Persero on December 2, 2024 and sell it today you would lose (2.00) from holding Bank Mandiri Persero or give up 6.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	27.44%
Values	Daily Returns

Bank Mandiri Persero  vs.  PacifiCorp

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

PacifiCorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days PacifiCorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential 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.

Pair Trading with Bank Mandiri and PacifiCorp

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

The idea behind Bank Mandiri Persero and PacifiCorp 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 Commodity Directory module to find actively traded commodities issued by global exchanges.