Correlation Between Bank Mandiri and Oroco Resource

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

Diversification Opportunities for Bank Mandiri and Oroco Resource

0.21

Correlation Coefficient

Bank Mandiri  Oroco Resource

Modest diversification

The 3 months correlation between Bank and Oroco is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Oroco Resource Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oroco Resource 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 Oroco Resource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oroco Resource Corp has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Oroco Resource go up and down completely randomly.

Pair Corralation between Bank Mandiri and Oroco Resource

Assuming the 90 days horizon Bank Mandiri is expected to generate 9.95 times less return on investment than Oroco Resource. But when comparing it to its historical volatility, Bank Mandiri Persero is 1.35 times less risky than Oroco Resource. It trades about 0.07 of its potential returns per unit of risk. Oroco Resource Corp is currently generating about 0.49 of returns per unit of risk over similar time horizon. If you would invest  18.00  in Oroco Resource Corp on December 28, 2024 and sell it today you would earn a total of  11.00  from holding Oroco Resource Corp or generate 61.11% return on investment over 90 days.

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

Bank Mandiri Persero  vs.  Oroco Resource Corp

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 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.

Oroco Resource Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oroco Resource Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Oroco Resource reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bank Mandiri and Oroco Resource

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

The idea behind Bank Mandiri Persero and Oroco Resource 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.