Correlation Between BANK MANDIRI and SBA Communications

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

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

Diversification Opportunities for BANK MANDIRI and SBA Communications

-0.68

Correlation Coefficient

BANK MANDIRI  SBA Communications

Excellent diversification

The 3 months correlation between BANK and SBA is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and SBA Communications Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBA Communications Corp 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 SBA Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBA Communications Corp has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and SBA Communications go up and down completely randomly.

Pair Corralation between BANK MANDIRI and SBA Communications

Assuming the 90 days trading horizon BANK MANDIRI is expected to under-perform the SBA Communications. In addition to that, BANK MANDIRI is 3.47 times more volatile than SBA Communications Corp. It trades about -0.07 of its total potential returns per unit of risk. SBA Communications Corp is currently generating about 0.07 per unit of volatility. If you would invest  18,937  in SBA Communications Corp on December 20, 2024 and sell it today you would earn a total of  1,273  from holding SBA Communications Corp or generate 6.72% 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.  SBA Communications Corp

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 fragile 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.

SBA Communications Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SBA Communications Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, SBA Communications may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with BANK MANDIRI and SBA Communications

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

The idea behind BANK MANDIRI and SBA Communications Corp 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.