Correlation Between Bank Mandiri and Retail Holdings

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

Diversification Opportunities for Bank Mandiri and Retail Holdings

0.0

Correlation Coefficient

Bank Mandiri  Retail Holdings

Pay attention - limited upside

The 3 months correlation between Bank and Retail is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Retail Holdings NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retail Holdings NV 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 Retail Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retail Holdings NV has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Retail Holdings go up and down completely randomly.

Pair Corralation between Bank Mandiri and Retail Holdings

If you would invest (100.00) in Retail Holdings NV on December 2, 2024 and sell it today you would earn a total of  100.00  from holding Retail Holdings NV or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Bank Mandiri Persero  vs.  Retail Holdings NV

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.

Retail Holdings NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Retail Holdings NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Retail Holdings is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Bank Mandiri and Retail Holdings

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

The idea behind Bank Mandiri Persero and Retail Holdings NV 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.