Correlation Between RESAAS Services and Bank Mandiri

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

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

Diversification Opportunities for RESAAS Services and Bank Mandiri

-0.22

Correlation Coefficient

RESAAS Services  Bank Mandiri

Very good diversification

The 3 months correlation between RESAAS and Bank is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding RESAAS Services 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 RESAAS Services 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 RESAAS Services 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 RESAAS Services i.e., RESAAS Services and Bank Mandiri go up and down completely randomly.

Pair Corralation between RESAAS Services and Bank Mandiri

Assuming the 90 days horizon RESAAS Services is expected to under-perform the Bank Mandiri. In addition to that, RESAAS Services is 3.96 times more volatile than Bank Mandiri Persero. It trades about -0.04 of its total potential returns per unit of risk. Bank Mandiri Persero is currently generating about -0.09 per unit of volatility. If you would invest  1,738  in Bank Mandiri Persero on February 4, 2024 and sell it today you would lose (194.00) from holding Bank Mandiri Persero or give up 11.16% of portfolio value over 90 days.

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

RESAAS Services  vs.  Bank Mandiri Persero

RESAAS Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RESAAS Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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 latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with RESAAS Services and Bank Mandiri

The main advantage of trading using opposite RESAAS Services and Bank Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RESAAS Services 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 RESAAS Services 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.