Correlation Between BANK MANDIRI and 01 Communique

Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI and 01 Communique 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 01 Communique into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BANK MANDIRI and 01 Communique Laboratory, you can compare the effects of market volatilities on BANK MANDIRI and 01 Communique 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 01 Communique. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and 01 Communique.

Diversification Opportunities for BANK MANDIRI and 01 Communique

-0.66

Correlation Coefficient

BANK MANDIRI  01 Communique

Excellent diversification

The 3 months correlation between BANK and DFK is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and 01 Communique Laboratory in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 01 Communique Laboratory 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 01 Communique. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 01 Communique Laboratory has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and 01 Communique go up and down completely randomly.

Pair Corralation between BANK MANDIRI and 01 Communique

Assuming the 90 days trading horizon BANK MANDIRI is expected to under-perform the 01 Communique. But the stock apears to be less risky and, when comparing its historical volatility, BANK MANDIRI is 2.65 times less risky than 01 Communique. The stock trades about 0.0 of its potential returns per unit of risk. The 01 Communique Laboratory is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  26.00  in 01 Communique Laboratory on October 15, 2024 and sell it today you would earn a total of  3.00  from holding 01 Communique Laboratory or generate 11.54% 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.  01 Communique Laboratory

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 fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

01 Communique Laboratory

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in 01 Communique Laboratory are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, 01 Communique reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BANK MANDIRI and 01 Communique

The main advantage of trading using opposite BANK MANDIRI and 01 Communique positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK MANDIRI position performs unexpectedly, 01 Communique 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 01 Communique will offset losses from the drop in 01 Communique's long position.

The idea behind BANK MANDIRI and 01 Communique Laboratory 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.