Correlation Between Bank Mandiri and Boosh Plant

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

Diversification Opportunities for Bank Mandiri and Boosh Plant

-0.54

Correlation Coefficient

Bank Mandiri  Boosh Plant

Excellent diversification

The 3 months correlation between Bank and Boosh is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Boosh Plant Based Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boosh Plant Based 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 Boosh Plant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boosh Plant Based has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Boosh Plant go up and down completely randomly.

Pair Corralation between Bank Mandiri and Boosh Plant

Assuming the 90 days horizon Bank Mandiri is expected to generate 171.97 times less return on investment than Boosh Plant. But when comparing it to its historical volatility, Bank Mandiri Persero is 9.74 times less risky than Boosh Plant. It trades about 0.01 of its potential returns per unit of risk. Boosh Plant Based Brands is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  0.31  in Boosh Plant Based Brands on September 30, 2024 and sell it today you would earn a total of  0.69  from holding Boosh Plant Based Brands or generate 222.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Bank Mandiri Persero  vs.  Boosh Plant Based Brands

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.

Boosh Plant Based

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Boosh Plant Based Brands are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating forward indicators, Boosh Plant reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bank Mandiri and Boosh Plant

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

The idea behind Bank Mandiri Persero and Boosh Plant Based Brands 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.