Correlation Between PT Bank and Apple

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

Diversification Opportunities for PT Bank and Apple

-0.75

Correlation Coefficient

PT Bank  Apple

Pay attention - limited upside

The 3 months correlation between PQ9 and Apple is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Mandiri and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of PT Bank i.e., PT Bank and Apple go up and down completely randomly.

Pair Corralation between PT Bank and Apple

Assuming the 90 days horizon PT Bank Mandiri is expected to under-perform the Apple. In addition to that, PT Bank is 4.22 times more volatile than Apple Inc. It trades about -0.08 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.29 per unit of volatility. If you would invest  21,275  in Apple Inc on September 24, 2024 and sell it today you would earn a total of  3,055  from holding Apple Inc or generate 14.36% return on investment over 90 days.

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

PT Bank Mandiri  vs.  Apple Inc

PT Bank Mandiri

Risk-Adjusted Performance

0 of 100

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 January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Apple Inc

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile fundamental indicators, Apple displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Bank and Apple

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

The idea behind PT Bank Mandiri and Apple Inc 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.

Check out your portfolio center.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.