Correlation Between Bank Mandiri and Core Assets

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

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

Diversification Opportunities for Bank Mandiri and Core Assets

-0.51

Correlation Coefficient

Bank Mandiri  Core Assets

Excellent diversification

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

Pair Corralation between Bank Mandiri and Core Assets

Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the Core Assets. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Mandiri Persero is 4.3 times less risky than Core Assets. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Core Assets Corp is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  18.00  in Core Assets Corp on May 1, 2025 and sell it today you would earn a total of  25.00  from holding Core Assets Corp or generate 138.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Bank Mandiri Persero  vs.  Core Assets Corp

Bank Mandiri Persero

Risk-Adjusted Performance

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 fairly strong basic indicators, Bank Mandiri is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Core Assets Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Core Assets Corp are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Core Assets reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bank Mandiri and Core Assets

The main advantage of trading using opposite Bank Mandiri and Core Assets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Core Assets 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 Core Assets will offset losses from the drop in Core Assets' long position.

The idea behind Bank Mandiri Persero and Core Assets Corp 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.