Correlation Between Bank Mandiri and RPT Realty

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

Diversification Opportunities for Bank Mandiri and RPT Realty

-0.84

Correlation Coefficient

Bank Mandiri  RPT Realty

Pay attention - limited upside

The 3 months correlation between Bank and RPT is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and RPT Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RPT Realty 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 RPT Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RPT Realty has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and RPT Realty go up and down completely randomly.

Pair Corralation between Bank Mandiri and RPT Realty

Assuming the 90 days horizon Bank Mandiri Persero is expected to generate 0.93 times more return on investment than RPT Realty. However, Bank Mandiri Persero is 1.07 times less risky than RPT Realty. It trades about 0.04 of its potential returns per unit of risk. RPT Realty is currently generating about 0.03 per unit of risk. If you would invest  1,201  in Bank Mandiri Persero on September 3, 2024 and sell it today you would earn a total of  363.00  from holding Bank Mandiri Persero or generate 30.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	30.91%
Values	Daily Returns

Bank Mandiri Persero  vs.  RPT Realty

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 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.

RPT Realty

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Bank Mandiri and RPT Realty

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

The idea behind Bank Mandiri Persero and RPT Realty 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.