Correlation Between BANK MANDIRI and OPKO HEALTH

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

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

Diversification Opportunities for BANK MANDIRI and OPKO HEALTH

-0.72

Correlation Coefficient

BANK MANDIRI  OPKO HEALTH

Pay attention - limited upside

The 3 months correlation between BANK and OPKO is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and OPKO HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPKO HEALTH 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 OPKO HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPKO HEALTH has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and OPKO HEALTH go up and down completely randomly.

Pair Corralation between BANK MANDIRI and OPKO HEALTH

Assuming the 90 days trading horizon BANK MANDIRI is expected to under-perform the OPKO HEALTH. In addition to that, BANK MANDIRI is 2.35 times more volatile than OPKO HEALTH. It trades about -0.16 of its total potential returns per unit of risk. OPKO HEALTH is currently generating about 0.06 per unit of volatility. If you would invest  139.00  in OPKO HEALTH on October 6, 2024 and sell it today you would earn a total of  3.00  from holding OPKO HEALTH or generate 2.16% return on investment over 90 days.

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

BANK MANDIRI  vs.  OPKO HEALTH

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.

OPKO HEALTH

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in OPKO HEALTH are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, OPKO HEALTH is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with BANK MANDIRI and OPKO HEALTH

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

The idea behind BANK MANDIRI and OPKO HEALTH 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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.