Correlation Between Bank Mandiri and Video River

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

Diversification Opportunities for Bank Mandiri and Video River

0.71

Correlation Coefficient

Bank Mandiri  Video River

Poor diversification

The 3 months correlation between Bank and Video is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Video River Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Video River Networks 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 Video River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Video River Networks has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Video River go up and down completely randomly.

Pair Corralation between Bank Mandiri and Video River

Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the Video River. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Mandiri Persero is 13.26 times less risky than Video River. The pink sheet trades about -0.11 of its potential returns per unit of risk. The Video River Networks is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  0.65  in Video River Networks on September 3, 2024 and sell it today you would lose (0.49) from holding Video River Networks or give up 75.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Bank Mandiri Persero  vs.  Video River Networks

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 latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Video River Networks

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Video River Networks are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical indicators, Video River disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bank Mandiri and Video River

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

The idea behind Bank Mandiri Persero and Video River Networks 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.