Correlation Between Bank Mandiri and ARRWW Old

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

Diversification Opportunities for Bank Mandiri and ARRWW Old

-0.83

Correlation Coefficient

Bank Mandiri  ARRWW Old

Pay attention - limited upside

The 3 months correlation between Bank and ARRWW is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and ARRWW Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARRWW Old 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 ARRWW Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARRWW Old has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and ARRWW Old go up and down completely randomly.

Pair Corralation between Bank Mandiri and ARRWW Old

If you would invest  20.00  in ARRWW Old on October 10, 2024 and sell it today you would earn a total of  0.00  from holding ARRWW Old or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	1.64%
Values	Daily Returns

Bank Mandiri Persero  vs.  ARRWW Old

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

ARRWW Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ARRWW Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, ARRWW Old is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Bank Mandiri and ARRWW Old

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

The idea behind Bank Mandiri Persero and ARRWW Old 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.

Check out your portfolio center.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.