Correlation Between Bank Mandiri and Pinetree Capital

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

Diversification Opportunities for Bank Mandiri and Pinetree Capital

-0.57

Correlation Coefficient

Bank Mandiri  Pinetree Capital

Excellent diversification

The 3 months correlation between Bank and Pinetree is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Pinetree Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinetree 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 Pinetree Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinetree Capital has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Pinetree Capital go up and down completely randomly.

Pair Corralation between Bank Mandiri and Pinetree Capital

Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the Pinetree Capital. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Mandiri Persero is 1.41 times less risky than Pinetree Capital. The pink sheet trades about -0.05 of its potential returns per unit of risk. The Pinetree Capital is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  763.00  in Pinetree Capital on December 29, 2024 and sell it today you would earn a total of  237.00  from holding Pinetree Capital or generate 31.06% 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.  Pinetree 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 latest fragile 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.

Pinetree Capital

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pinetree Capital are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Pinetree Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bank Mandiri and Pinetree Capital

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

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