Correlation Between Bank Mandiri and Priorityome Fund

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

Diversification Opportunities for Bank Mandiri and Priorityome Fund

-0.47

Correlation Coefficient

Bank Mandiri  Priorityome Fund

Very good diversification

The 3 months correlation between Bank and Priorityome is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Priorityome Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Priorityome Fund 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 Priorityome Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Priorityome Fund has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Priorityome Fund go up and down completely randomly.

Pair Corralation between Bank Mandiri and Priorityome Fund

Assuming the 90 days horizon Bank Mandiri Persero is expected to generate 1.29 times more return on investment than Priorityome Fund. However, Bank Mandiri is 1.29 times more volatile than Priorityome Fund. It trades about 0.03 of its potential returns per unit of risk. Priorityome Fund is currently generating about 0.02 per unit of risk. If you would invest  28.00  in Bank Mandiri Persero on October 5, 2024 and sell it today you would earn a total of  7.00  from holding Bank Mandiri Persero or generate 25.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.45%
Values	Daily Returns

Bank Mandiri Persero  vs.  Priorityome Fund

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

Priorityome Fund

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Priorityome Fund are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Priorityome Fund is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Bank Mandiri and Priorityome Fund

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

The idea behind Bank Mandiri Persero and Priorityome Fund 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.