Correlation Between BANK MANDIRI and GLATFELTER

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

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

Diversification Opportunities for BANK MANDIRI and GLATFELTER

0.56

Correlation Coefficient

BANK MANDIRI  GLATFELTER

Very weak diversification

The 3 months correlation between BANK and GLATFELTER is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and GLATFELTER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLATFELTER 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 GLATFELTER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GLATFELTER has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and GLATFELTER go up and down completely randomly.

Pair Corralation between BANK MANDIRI and GLATFELTER

Assuming the 90 days trading horizon BANK MANDIRI is expected to under-perform the GLATFELTER. But the stock apears to be less risky and, when comparing its historical volatility, BANK MANDIRI is 1.54 times less risky than GLATFELTER. The stock trades about -0.13 of its potential returns per unit of risk. The GLATFELTER is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  1,970  in GLATFELTER on October 21, 2024 and sell it today you would lose (230.00) from holding GLATFELTER or give up 11.68% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	81.97%
Values	Daily Returns

BANK MANDIRI  vs.  GLATFELTER

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 uncertain 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.

GLATFELTER

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GLATFELTER has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with BANK MANDIRI and GLATFELTER

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

The idea behind BANK MANDIRI and GLATFELTER 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.