Correlation Between Bank Mandiri and Sterling Check

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

Diversification Opportunities for Bank Mandiri and Sterling Check

-0.81

Correlation Coefficient

Bank Mandiri  Sterling Check

Pay attention - limited upside

The 3 months correlation between Bank and Sterling is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Sterling Check Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Check Corp 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 Sterling Check. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Check Corp has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Sterling Check go up and down completely randomly.

Pair Corralation between Bank Mandiri and Sterling Check

Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the Sterling Check. In addition to that, Bank Mandiri is 2.28 times more volatile than Sterling Check Corp. It trades about -0.08 of its total potential returns per unit of risk. Sterling Check Corp is currently generating about -0.14 per unit of volatility. If you would invest  1,715  in Sterling Check Corp on October 21, 2024 and sell it today you would lose (41.00) from holding Sterling Check Corp or give up 2.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	14.52%
Values	Daily Returns

Bank Mandiri Persero  vs.  Sterling Check Corp

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 weak 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.

Sterling Check Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sterling Check Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Bank Mandiri and Sterling Check

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

The idea behind Bank Mandiri Persero and Sterling Check Corp 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.