Correlation Between BANK MANDIRI and Sinopharm Group

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

Diversification Opportunities for BANK MANDIRI and Sinopharm Group

-0.48

Correlation Coefficient

BANK MANDIRI  Sinopharm Group

Very good diversification

The 3 months correlation between BANK and Sinopharm is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and Sinopharm Group Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinopharm Group 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 Sinopharm Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinopharm Group has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and Sinopharm Group go up and down completely randomly.

Pair Corralation between BANK MANDIRI and Sinopharm Group

Assuming the 90 days trading horizon BANK MANDIRI is expected to under-perform the Sinopharm Group. In addition to that, BANK MANDIRI is 1.34 times more volatile than Sinopharm Group Co. It trades about -0.11 of its total potential returns per unit of risk. Sinopharm Group Co is currently generating about 0.07 per unit of volatility. If you would invest  238.00  in Sinopharm Group Co on October 24, 2024 and sell it today you would earn a total of  14.00  from holding Sinopharm Group Co or generate 5.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.31%
Values	Daily Returns

BANK MANDIRI  vs.  Sinopharm Group Co

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.

Sinopharm Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sinopharm Group Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Sinopharm Group may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with BANK MANDIRI and Sinopharm Group

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

The idea behind BANK MANDIRI and Sinopharm Group Co 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.