Correlation Between BANK MANDIRI and Clean Harbors

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

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

Diversification Opportunities for BANK MANDIRI and Clean Harbors

0.81

Correlation Coefficient

BANK MANDIRI  Clean Harbors

Very poor diversification

The 3 months correlation between BANK and Clean is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and Clean Harbors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Harbors 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 Clean Harbors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Harbors has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and Clean Harbors go up and down completely randomly.

Pair Corralation between BANK MANDIRI and Clean Harbors

Assuming the 90 days trading horizon BANK MANDIRI is expected to under-perform the Clean Harbors. In addition to that, BANK MANDIRI is 2.92 times more volatile than Clean Harbors. It trades about -0.11 of its total potential returns per unit of risk. Clean Harbors is currently generating about -0.16 per unit of volatility. If you would invest  21,800  in Clean Harbors on December 29, 2024 and sell it today you would lose (3,465) from holding Clean Harbors or give up 15.89% of portfolio value over 90 days.

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

BANK MANDIRI  vs.  Clean Harbors

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.

Clean Harbors

Risk-Adjusted Performance

Very Weak

Over the last 90 days Clean Harbors has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with BANK MANDIRI and Clean Harbors

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

The idea behind BANK MANDIRI and Clean Harbors 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.