Correlation Between Bank Mandiri and Stevia Corp

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

Diversification Opportunities for Bank Mandiri and Stevia Corp

-0.4

Correlation Coefficient

Bank Mandiri  Stevia Corp

Very good diversification

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

Pair Corralation between Bank Mandiri and Stevia Corp

Assuming the 90 days horizon Bank Mandiri is expected to generate 1.01 times less return on investment than Stevia Corp. In addition to that, Bank Mandiri is 1.03 times more volatile than Stevia Corp. It trades about 0.06 of its total potential returns per unit of risk. Stevia Corp is currently generating about 0.06 per unit of volatility. If you would invest  0.44  in Stevia Corp on October 5, 2024 and sell it today you would lose (0.16) from holding Stevia Corp or give up 36.36% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	90.51%
Values	Daily Returns

Bank Mandiri Persero  vs.  Stevia 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 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.

Stevia Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Stevia Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Stevia Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bank Mandiri and Stevia Corp

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

The idea behind Bank Mandiri Persero and Stevia 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.