Correlation Between Bank Mandiri and Talaris Therapeutics

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

Diversification Opportunities for Bank Mandiri and Talaris Therapeutics

-0.43

Correlation Coefficient

Bank Mandiri  Talaris Therapeutics

Very good diversification

The 3 months correlation between Bank and Talaris is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Talaris Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talaris Therapeutics 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 Talaris Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Talaris Therapeutics has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Talaris Therapeutics go up and down completely randomly.

Pair Corralation between Bank Mandiri and Talaris Therapeutics

Assuming the 90 days horizon Bank Mandiri is expected to generate 1.0 times less return on investment than Talaris Therapeutics. In addition to that, Bank Mandiri is 2.82 times more volatile than Talaris Therapeutics. It trades about 0.06 of its total potential returns per unit of risk. Talaris Therapeutics is currently generating about 0.16 per unit of volatility. If you would invest  109.00  in Talaris Therapeutics on September 24, 2024 and sell it today you would earn a total of  189.00  from holding Talaris Therapeutics or generate 173.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	31.04%
Values	Daily Returns

Bank Mandiri Persero  vs.  Talaris Therapeutics

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 unsteady 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.

Talaris Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Talaris Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Talaris Therapeutics is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Bank Mandiri and Talaris Therapeutics

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

The idea behind Bank Mandiri Persero and Talaris Therapeutics 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.