Correlation Between BANK MANDIRI and Fiskars Oyj

Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI and Fiskars Oyj 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 Fiskars Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BANK MANDIRI and Fiskars Oyj Abp, you can compare the effects of market volatilities on BANK MANDIRI and Fiskars Oyj 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 Fiskars Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and Fiskars Oyj.

Diversification Opportunities for BANK MANDIRI and Fiskars Oyj

0.65

Correlation Coefficient

BANK MANDIRI  Fiskars Oyj

Poor diversification

The 3 months correlation between BANK and Fiskars is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and Fiskars Oyj Abp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiskars Oyj Abp 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 are associated (or correlated) with Fiskars Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fiskars Oyj Abp has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and Fiskars Oyj go up and down completely randomly.

Pair Corralation between BANK MANDIRI and Fiskars Oyj

Assuming the 90 days trading horizon BANK MANDIRI is expected to generate 1.83 times more return on investment than Fiskars Oyj. However, BANK MANDIRI is 1.83 times more volatile than Fiskars Oyj Abp. It trades about 0.01 of its potential returns per unit of risk. Fiskars Oyj Abp is currently generating about -0.09 per unit of risk. If you would invest  32.00  in BANK MANDIRI on September 23, 2024 and sell it today you would earn a total of  0.00  from holding BANK MANDIRI or generate 0.0% return on investment over 90 days.

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

BANK MANDIRI  vs.  Fiskars Oyj Abp

BANK MANDIRI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BANK MANDIRI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Fiskars Oyj Abp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fiskars Oyj Abp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Fiskars Oyj is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with BANK MANDIRI and Fiskars Oyj

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

The idea behind BANK MANDIRI and Fiskars Oyj Abp 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.