Correlation Between BANK MANDIRI and Sinopharm Group

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

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

Diversification Opportunities for BANK MANDIRI and Sinopharm Group

-0.82

Correlation Coefficient

BANK MANDIRI  Sinopharm Group

Pay attention - limited upside

The 3 months correlation between BANK and Sinopharm is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and Sinopharm Group Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinopharm Group 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 Sinopharm Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinopharm Group has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and Sinopharm Group go up and down completely randomly.

Pair Corralation between BANK MANDIRI and Sinopharm Group

Assuming the 90 days trading horizon BANK MANDIRI is expected to generate 3.72 times less return on investment than Sinopharm Group. But when comparing it to its historical volatility, BANK MANDIRI is 1.71 times less risky than Sinopharm Group. It trades about 0.03 of its potential returns per unit of risk. Sinopharm Group Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  99.00  in Sinopharm Group Co on October 9, 2024 and sell it today you would earn a total of  158.00  from holding Sinopharm Group Co or generate 159.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

BANK MANDIRI  vs.  Sinopharm Group Co

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 latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Sinopharm Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sinopharm Group Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Sinopharm Group may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with BANK MANDIRI and Sinopharm Group

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

The idea behind BANK MANDIRI and Sinopharm Group Co 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.