Correlation Between Bank Mandiri and Fortitude Gold

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

Diversification Opportunities for Bank Mandiri and Fortitude Gold

-0.66

Correlation Coefficient

Bank Mandiri  Fortitude Gold

Excellent diversification

The 3 months correlation between Bank and Fortitude is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Fortitude Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortitude Gold 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 Fortitude Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortitude Gold Corp has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Fortitude Gold go up and down completely randomly.

Pair Corralation between Bank Mandiri and Fortitude Gold

Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the Fortitude Gold. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Mandiri Persero is 1.02 times less risky than Fortitude Gold. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Fortitude Gold Corp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  450.00  in Fortitude Gold Corp on September 5, 2024 and sell it today you would earn a total of  83.00  from holding Fortitude Gold Corp or generate 18.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.82%
Values	Daily Returns

Bank Mandiri Persero  vs.  Fortitude Gold Corp

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 January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Fortitude Gold Corp

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fortitude Gold Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Fortitude Gold displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bank Mandiri and Fortitude Gold

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

The idea behind Bank Mandiri Persero and Fortitude Gold 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.