Correlation Between Bank Mandiri and Akbank Turk

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

Diversification Opportunities for Bank Mandiri and Akbank Turk

0.03

Correlation Coefficient

Bank Mandiri  Akbank Turk

Significant diversification

The 3 months correlation between Bank and Akbank is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Akbank Turk Anonim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akbank Turk Anonim 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 Akbank Turk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akbank Turk Anonim has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Akbank Turk go up and down completely randomly.

Pair Corralation between Bank Mandiri and Akbank Turk

Assuming the 90 days horizon Bank Mandiri is expected to generate 558.29 times less return on investment than Akbank Turk. But when comparing it to its historical volatility, Bank Mandiri Persero is 1.41 times less risky than Akbank Turk. It trades about 0.0 of its potential returns per unit of risk. Akbank Turk Anonim is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  302.00  in Akbank Turk Anonim on September 12, 2024 and sell it today you would earn a total of  53.00  from holding Akbank Turk Anonim or generate 17.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Bank Mandiri Persero  vs.  Akbank Turk Anonim

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. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Akbank Turk Anonim

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Akbank Turk Anonim are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Akbank Turk showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bank Mandiri and Akbank Turk

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

The idea behind Bank Mandiri Persero and Akbank Turk Anonim 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.