Correlation Between Uwharrie Capital and Bank Mandiri

Can any of the company-specific risk be diversified away by investing in both Uwharrie Capital 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 Uwharrie Capital and Bank Mandiri into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Uwharrie Capital Corp and Bank Mandiri Persero, you can compare the effects of market volatilities on Uwharrie Capital 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 Uwharrie Capital with a short position of Bank Mandiri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uwharrie Capital and Bank Mandiri.

Diversification Opportunities for Uwharrie Capital and Bank Mandiri

-0.86

Correlation Coefficient

Uwharrie Capital  Bank Mandiri

Pay attention - limited upside

The 3 months correlation between Uwharrie and Bank is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Uwharrie Capital Corp and Bank Mandiri Persero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Mandiri Persero and Uwharrie Capital 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 Uwharrie Capital Corp 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 Persero has no effect on the direction of Uwharrie Capital i.e., Uwharrie Capital and Bank Mandiri go up and down completely randomly.

Pair Corralation between Uwharrie Capital and Bank Mandiri

Given the investment horizon of 90 days Uwharrie Capital Corp is expected to generate 0.5 times more return on investment than Bank Mandiri. However, Uwharrie Capital Corp is 1.98 times less risky than Bank Mandiri. It trades about -0.04 of its potential returns per unit of risk. Bank Mandiri Persero is currently generating about -0.17 per unit of risk. If you would invest  850.00  in Uwharrie Capital Corp on September 1, 2024 and sell it today you would lose (10.00) from holding Uwharrie Capital Corp or give up 1.18% of portfolio value over 90 days.

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

Uwharrie Capital Corp  vs.  Bank Mandiri Persero

Uwharrie Capital Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Uwharrie Capital Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical indicators, Uwharrie Capital may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Bank Mandiri Persero

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bank Mandiri Persero has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Uwharrie Capital and Bank Mandiri

The main advantage of trading using opposite Uwharrie Capital and Bank Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uwharrie Capital 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 Uwharrie Capital Corp and Bank Mandiri Persero 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.