Correlation Between BANK MANDIRI and Addtech AB

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

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

Diversification Opportunities for BANK MANDIRI and Addtech AB

-0.57

Correlation Coefficient

BANK MANDIRI  Addtech AB

Excellent diversification

The 3 months correlation between BANK and Addtech is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and Addtech AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addtech AB 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 Addtech AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addtech AB has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and Addtech AB go up and down completely randomly.

Pair Corralation between BANK MANDIRI and Addtech AB

Assuming the 90 days trading horizon BANK MANDIRI is expected to under-perform the Addtech AB. In addition to that, BANK MANDIRI is 1.21 times more volatile than Addtech AB. It trades about -0.12 of its total potential returns per unit of risk. Addtech AB is currently generating about 0.09 per unit of volatility. If you would invest  2,618  in Addtech AB on December 22, 2024 and sell it today you would earn a total of  244.00  from holding Addtech AB or generate 9.32% return on investment over 90 days.

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

BANK MANDIRI  vs.  Addtech AB

BANK MANDIRI

Risk-Adjusted Performance

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 comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Addtech AB

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Addtech AB are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Addtech AB may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with BANK MANDIRI and Addtech AB

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

The idea behind BANK MANDIRI and Addtech AB 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.