Correlation Between Bank Mandiri and Schweizerische Nationalbank

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

Diversification Opportunities for Bank Mandiri and Schweizerische Nationalbank

0.72

Correlation Coefficient

Bank Mandiri  Schweizerische Nationalbank

Poor diversification

The 3 months correlation between Bank and Schweizerische is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Schweizerische Nationalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schweizerische Nationalbank 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 Schweizerische Nationalbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schweizerische Nationalbank has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Schweizerische Nationalbank go up and down completely randomly.

Pair Corralation between Bank Mandiri and Schweizerische Nationalbank

Assuming the 90 days horizon Bank Mandiri Persero is expected to generate 2.42 times more return on investment than Schweizerische Nationalbank. However, Bank Mandiri is 2.42 times more volatile than Schweizerische Nationalbank. It trades about 0.03 of its potential returns per unit of risk. Schweizerische Nationalbank is currently generating about -0.05 per unit of risk. If you would invest  35.00  in Bank Mandiri Persero on September 12, 2024 and sell it today you would earn a total of  5.00  from holding Bank Mandiri Persero or generate 14.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	86.93%
Values	Daily Returns

Bank Mandiri Persero  vs.  Schweizerische Nationalbank

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.

Schweizerische Nationalbank

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Schweizerische Nationalbank 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 January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Bank Mandiri and Schweizerische Nationalbank

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

The idea behind Bank Mandiri Persero and Schweizerische Nationalbank 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.