Correlation Between BANK MANDIRI and Sony Group

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

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

Diversification Opportunities for BANK MANDIRI and Sony Group

-0.82

Correlation Coefficient

BANK MANDIRI  Sony Group

Pay attention - limited upside

The 3 months correlation between BANK and Sony is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and Sony Group Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sony Group Corp 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 Sony Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sony Group Corp has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and Sony Group go up and down completely randomly.

Pair Corralation between BANK MANDIRI and Sony Group

Assuming the 90 days trading horizon BANK MANDIRI is expected to under-perform the Sony Group. In addition to that, BANK MANDIRI is 1.07 times more volatile than Sony Group Corp. It trades about -0.09 of its total potential returns per unit of risk. Sony Group Corp is currently generating about 0.18 per unit of volatility. If you would invest  1,605  in Sony Group Corp on October 25, 2024 and sell it today you would earn a total of  403.00  from holding Sony Group Corp or generate 25.11% return on investment over 90 days.

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

BANK MANDIRI  vs.  Sony Group Corp

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 February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Sony Group Corp

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sony Group Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, Sony Group sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BANK MANDIRI and Sony Group

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

The idea behind BANK MANDIRI and Sony Group Corp 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.