Correlation Between BANK MANDIRI and SL Green

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

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

Diversification Opportunities for BANK MANDIRI and SL Green

-0.69

Correlation Coefficient

BANK MANDIRI  SL Green

Excellent diversification

The 3 months correlation between BANK and GEI is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI and SL Green Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SL Green Realty 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 SL Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SL Green Realty has no effect on the direction of BANK MANDIRI i.e., BANK MANDIRI and SL Green go up and down completely randomly.

Pair Corralation between BANK MANDIRI and SL Green

Assuming the 90 days trading horizon BANK MANDIRI is expected to under-perform the SL Green. In addition to that, BANK MANDIRI is 1.18 times more volatile than SL Green Realty. It trades about -0.07 of its total potential returns per unit of risk. SL Green Realty is currently generating about 0.23 per unit of volatility. If you would invest  6,208  in SL Green Realty on August 31, 2024 and sell it today you would earn a total of  1,286  from holding SL Green Realty or generate 20.72% 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.  SL Green Realty

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.

SL Green Realty

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SL Green Realty are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SL Green reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BANK MANDIRI and SL Green

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

The idea behind BANK MANDIRI and SL Green Realty 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.