Correlation Between BANK MANDIRI and FORMPIPE SOFTWARE

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

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

Diversification Opportunities for BANK MANDIRI and FORMPIPE SOFTWARE

-0.63

Correlation Coefficient

BANK MANDIRI  FORMPIPE SOFTWARE

Excellent diversification

The 3 months correlation between BANK and FORMPIPE is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and FORMPIPE SOFTWARE AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FORMPIPE SOFTWARE has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and FORMPIPE SOFTWARE go up and down completely randomly.

Pair Corralation between BANK MANDIRI and FORMPIPE SOFTWARE

Assuming the 90 days trading horizon BANK MANDIRI is expected to generate 5.76 times less return on investment than FORMPIPE SOFTWARE. But when comparing it to its historical volatility, BANK MANDIRI is 1.36 times less risky than FORMPIPE SOFTWARE. It trades about 0.01 of its potential returns per unit of risk. FORMPIPE SOFTWARE AB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  203.00  in FORMPIPE SOFTWARE AB on September 3, 2024 and sell it today you would earn a total of  9.00  from holding FORMPIPE SOFTWARE AB or generate 4.43% 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.  FORMPIPE SOFTWARE AB

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 comparatively stable basic indicators, BANK MANDIRI is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

FORMPIPE SOFTWARE

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FORMPIPE SOFTWARE AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, FORMPIPE SOFTWARE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with BANK MANDIRI and FORMPIPE SOFTWARE

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

The idea behind BANK MANDIRI and FORMPIPE SOFTWARE 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.