Correlation Between Bank Mandiri and Oakworth Capital

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

Diversification Opportunities for Bank Mandiri and Oakworth Capital

0.47

Correlation Coefficient

Bank Mandiri  Oakworth Capital

Very weak diversification

The 3 months correlation between Bank and Oakworth is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Oakworth Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakworth Capital 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 Oakworth Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakworth Capital has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Oakworth Capital go up and down completely randomly.

Pair Corralation between Bank Mandiri and Oakworth Capital

Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the Oakworth Capital. In addition to that, Bank Mandiri is 3.2 times more volatile than Oakworth Capital. It trades about -0.14 of its total potential returns per unit of risk. Oakworth Capital is currently generating about 0.04 per unit of volatility. If you would invest  3,150  in Oakworth Capital on December 20, 2024 and sell it today you would earn a total of  60.00  from holding Oakworth Capital or generate 1.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	92.19%
Values	Daily Returns

Bank Mandiri Persero  vs.  Oakworth Capital

Bank Mandiri Persero

Risk-Adjusted Performance

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

Oakworth Capital

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Oakworth Capital are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound forward-looking signals, Oakworth Capital is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Bank Mandiri and Oakworth Capital

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

The idea behind Bank Mandiri Persero and Oakworth Capital 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.