Correlation Between ASPEN TECHINC and BANK MANDIRI

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

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

Diversification Opportunities for ASPEN TECHINC and BANK MANDIRI

-0.84

Correlation Coefficient

ASPEN TECHINC  BANK MANDIRI

Pay attention - limited upside

The 3 months correlation between ASPEN and BANK is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding ASPEN TECHINC DL and BANK MANDIRI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK MANDIRI and ASPEN TECHINC 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 ASPEN TECHINC DL 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 ASPEN TECHINC i.e., ASPEN TECHINC and BANK MANDIRI go up and down completely randomly.

Pair Corralation between ASPEN TECHINC and BANK MANDIRI

Assuming the 90 days horizon ASPEN TECHINC DL is expected to generate 0.46 times more return on investment than BANK MANDIRI. However, ASPEN TECHINC DL is 2.15 times less risky than BANK MANDIRI. It trades about 0.14 of its potential returns per unit of risk. BANK MANDIRI is currently generating about -0.34 per unit of risk. If you would invest  23,400  in ASPEN TECHINC DL on October 8, 2024 and sell it today you would earn a total of  400.00  from holding ASPEN TECHINC DL or generate 1.71% return on investment over 90 days.

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

ASPEN TECHINC DL  vs.  BANK MANDIRI

ASPEN TECHINC DL

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ASPEN TECHINC DL are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, ASPEN TECHINC 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 unsteady 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 ASPEN TECHINC and BANK MANDIRI

The main advantage of trading using opposite ASPEN TECHINC and BANK MANDIRI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASPEN TECHINC 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 ASPEN TECHINC DL 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.