Correlation Between PT Bank and ACCO BRANDS

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

By analyzing existing cross correlation between PT Bank Mandiri and ACCO BRANDS, you can compare the effects of market volatilities on PT Bank and ACCO BRANDS 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 PT Bank with a short position of ACCO BRANDS. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and ACCO BRANDS.

Diversification Opportunities for PT Bank and ACCO BRANDS

0.79

Correlation Coefficient

PT Bank  ACCO BRANDS

Poor diversification

The 3 months correlation between PQ9 and ACCO is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Mandiri and ACCO BRANDS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACCO BRANDS and PT Bank 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 PT Bank Mandiri are associated (or correlated) with ACCO BRANDS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACCO BRANDS has no effect on the direction of PT Bank i.e., PT Bank and ACCO BRANDS go up and down completely randomly.

Pair Corralation between PT Bank and ACCO BRANDS

Assuming the 90 days horizon PT Bank Mandiri is expected to generate 1.92 times more return on investment than ACCO BRANDS. However, PT Bank is 1.92 times more volatile than ACCO BRANDS. It trades about -0.05 of its potential returns per unit of risk. ACCO BRANDS is currently generating about -0.12 per unit of risk. If you would invest  32.00  in PT Bank Mandiri on December 19, 2024 and sell it today you would lose (7.00) from holding PT Bank Mandiri or give up 21.87% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

PT Bank Mandiri  vs.  ACCO BRANDS

PT Bank Mandiri

Risk-Adjusted Performance

Very Weak

Over the last 90 days PT Bank Mandiri has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

ACCO BRANDS

Risk-Adjusted Performance

Very Weak

Over the last 90 days ACCO BRANDS 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 fundamental drivers remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with PT Bank and ACCO BRANDS

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

The idea behind PT Bank Mandiri and ACCO BRANDS 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.