Correlation Between Bank Mandiri and TPT Strategic

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

Diversification Opportunities for Bank Mandiri and TPT Strategic

-0.54

Correlation Coefficient

Bank Mandiri  TPT Strategic

Excellent diversification

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

Pair Corralation between Bank Mandiri and TPT Strategic

Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the TPT Strategic. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Mandiri Persero is 21.3 times less risky than TPT Strategic. The pink sheet trades about -0.02 of its potential returns per unit of risk. The TPT Strategic is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  48.00  in TPT Strategic on October 7, 2024 and sell it today you would earn a total of  852.00  from holding TPT Strategic or generate 1775.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Bank Mandiri Persero  vs.  TPT Strategic

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

TPT Strategic

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TPT Strategic are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, TPT Strategic reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bank Mandiri and TPT Strategic

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

The idea behind Bank Mandiri Persero and TPT Strategic 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..