Correlation Between T MOBILE and BANK MANDIRI

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

By analyzing existing cross correlation between T MOBILE INCDL 00001 and BANK MANDIRI, you can compare the effects of market volatilities on T MOBILE and BANK MANDIRI 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 T MOBILE with a short position of BANK MANDIRI. Check out your portfolio center. Please also check ongoing floating volatility patterns of T MOBILE and BANK MANDIRI.

Diversification Opportunities for T MOBILE and BANK MANDIRI

-0.51

Correlation Coefficient

T MOBILE  BANK MANDIRI

Excellent diversification

The 3 months correlation between TM5 and BANK is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding T MOBILE INCDL 00001 and BANK MANDIRI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK MANDIRI and T MOBILE 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 T MOBILE INCDL 00001 are associated (or correlated) with BANK MANDIRI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK MANDIRI has no effect on the direction of T MOBILE i.e., T MOBILE and BANK MANDIRI go up and down completely randomly.

Pair Corralation between T MOBILE and BANK MANDIRI

Assuming the 90 days trading horizon T MOBILE INCDL 00001 is expected to generate 0.6 times more return on investment than BANK MANDIRI. However, T MOBILE INCDL 00001 is 1.68 times less risky than BANK MANDIRI. It trades about 0.08 of its potential returns per unit of risk. BANK MANDIRI is currently generating about 0.02 per unit of risk. If you would invest  13,085  in T MOBILE INCDL 00001 on October 10, 2024 and sell it today you would earn a total of  7,575  from holding T MOBILE INCDL 00001 or generate 57.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	97.4%
Values	Daily Returns

T MOBILE INCDL 00001  vs.  BANK MANDIRI

T MOBILE INCDL

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in T MOBILE INCDL 00001 are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, T MOBILE may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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 rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with T MOBILE and BANK MANDIRI

The main advantage of trading using opposite T MOBILE and BANK MANDIRI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T MOBILE position performs unexpectedly, BANK MANDIRI 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 BANK MANDIRI will offset losses from the drop in BANK MANDIRI's long position.

The idea behind T MOBILE INCDL 00001 and BANK MANDIRI 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.