Correlation Between Bank Mandiri and Uwharrie Capital

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

Diversification Opportunities for Bank Mandiri and Uwharrie Capital

-0.63

Correlation Coefficient

Bank Mandiri  Uwharrie Capital

Excellent diversification

The 3 months correlation between Bank and Uwharrie is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Uwharrie Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uwharrie Capital 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 Uwharrie Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uwharrie Capital Corp has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Uwharrie Capital go up and down completely randomly.

Pair Corralation between Bank Mandiri and Uwharrie Capital

Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the Uwharrie Capital. In addition to that, Bank Mandiri is 2.21 times more volatile than Uwharrie Capital Corp. It trades about 0.0 of its total potential returns per unit of risk. Uwharrie Capital Corp is currently generating about 0.0 per unit of volatility. If you would invest  850.00  in Uwharrie Capital Corp on December 29, 2024 and sell it today you would lose (25.00) from holding Uwharrie Capital Corp or give up 2.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Bank Mandiri Persero  vs.  Uwharrie Capital Corp

Bank Mandiri Persero

Risk-Adjusted Performance

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 nearly stable basic indicators, Bank Mandiri is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Uwharrie Capital Corp

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Bank Mandiri and Uwharrie Capital

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

The idea behind Bank Mandiri Persero and Uwharrie Capital 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..