Correlation Between Bank Mandiri and Sharecare

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

Diversification Opportunities for Bank Mandiri and Sharecare

-0.85

Correlation Coefficient

Bank Mandiri  Sharecare

Pay attention - limited upside

The 3 months correlation between Bank and Sharecare is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Sharecare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sharecare 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 Sharecare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sharecare has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Sharecare go up and down completely randomly.

Pair Corralation between Bank Mandiri and Sharecare

Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the Sharecare. In addition to that, Bank Mandiri is 6.92 times more volatile than Sharecare. It trades about -0.04 of its total potential returns per unit of risk. Sharecare is currently generating about 0.13 per unit of volatility. If you would invest  140.00  in Sharecare on September 12, 2024 and sell it today you would earn a total of  3.00  from holding Sharecare or generate 2.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	46.03%
Values	Daily Returns

Bank Mandiri Persero  vs.  Sharecare

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 latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Sharecare

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Sharecare has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Sharecare is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Bank Mandiri and Sharecare

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

The idea behind Bank Mandiri Persero and Sharecare 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 Transaction History module to view history of all your transactions and understand their impact on performance.