Correlation Between Bank Mandiri and Rubicon Technologies

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

Diversification Opportunities for Bank Mandiri and Rubicon Technologies

0.81

Correlation Coefficient

Bank Mandiri  Rubicon Technologies

Very poor diversification

The 3 months correlation between Bank and Rubicon is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Rubicon Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rubicon Technologies 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 Rubicon Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rubicon Technologies has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Rubicon Technologies go up and down completely randomly.

Pair Corralation between Bank Mandiri and Rubicon Technologies

Assuming the 90 days horizon Bank Mandiri Persero is expected to generate 0.16 times more return on investment than Rubicon Technologies. However, Bank Mandiri Persero is 6.41 times less risky than Rubicon Technologies. It trades about -0.01 of its potential returns per unit of risk. Rubicon Technologies is currently generating about -0.08 per unit of risk. If you would invest  1,598  in Bank Mandiri Persero on September 28, 2024 and sell it today you would lose (198.00) from holding Bank Mandiri Persero or give up 12.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	71.3%
Values	Daily Returns

Bank Mandiri Persero  vs.  Rubicon Technologies

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 unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Rubicon Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rubicon Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental drivers, Rubicon Technologies is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Bank Mandiri and Rubicon Technologies

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

The idea behind Bank Mandiri Persero and Rubicon Technologies 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.