Correlation Between Matahari Putra and Bank Mandiri

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

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

Diversification Opportunities for Matahari Putra and Bank Mandiri

-0.81

Correlation Coefficient

Matahari Putra  Bank Mandiri

Pay attention - limited upside

The 3 months correlation between Matahari and Bank is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Matahari Putra Prima 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 Matahari Putra 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 Matahari Putra Prima 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 Matahari Putra i.e., Matahari Putra and Bank Mandiri go up and down completely randomly.

Pair Corralation between Matahari Putra and Bank Mandiri

If you would invest  5,000  in Matahari Putra Prima on February 4, 2024 and sell it today you would earn a total of  0.00  from holding Matahari Putra Prima or generate 0.0% return on investment over 90 days.

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

Matahari Putra Prima  vs.  Bank Mandiri Persero

Matahari Putra Prima

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Matahari Putra Prima has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

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. Despite quite persistent basic indicators, Bank Mandiri is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Matahari Putra and Bank Mandiri

The main advantage of trading using opposite Matahari Putra and Bank Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matahari Putra 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 Matahari Putra Prima 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.