Correlation Between BANK MANDIRI and LANDI RENZO

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

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

Diversification Opportunities for BANK MANDIRI and LANDI RENZO

0.81

Correlation Coefficient

BANK MANDIRI  LANDI RENZO

Very poor diversification

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

Pair Corralation between BANK MANDIRI and LANDI RENZO

If you would invest  133.00  in LANDI RENZO on October 6, 2024 and sell it today you would earn a total of  0.00  from holding LANDI RENZO or generate 0.0% return on investment over 90 days.

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

BANK MANDIRI  vs.  LANDI RENZO

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 unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

LANDI RENZO

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LANDI RENZO has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with BANK MANDIRI and LANDI RENZO

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

The idea behind BANK MANDIRI and LANDI RENZO 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.