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

-0.35

Correlation Coefficient

Bank Mandiri  Uwharrie Capital

Very good diversification

The 3 months correlation between Bank and Uwharrie is -0.35. 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 3.84 times more volatile than Uwharrie Capital Corp. It trades about -0.11 of its total potential returns per unit of risk. Uwharrie Capital Corp is currently generating about 0.08 per unit of volatility. If you would invest  840.00  in Uwharrie Capital Corp on November 29, 2024 and sell it today you would earn a total of  60.00  from holding Uwharrie Capital Corp or generate 7.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.61%
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 weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Uwharrie Capital Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Uwharrie Capital Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical indicators, Uwharrie Capital may actually be approaching a critical reversion point that can send shares even higher in March 2025.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.