Correlation Between Bank Mandiri and Applied Molecular

Can any of the company-specific risk be diversified away by investing in both Bank Mandiri and Applied Molecular 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 Applied Molecular 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 Applied Molecular TransportInc, you can compare the effects of market volatilities on Bank Mandiri and Applied Molecular 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 Applied Molecular. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mandiri and Applied Molecular.

Diversification Opportunities for Bank Mandiri and Applied Molecular

-0.71

Correlation Coefficient

Bank Mandiri  Applied Molecular

Pay attention - limited upside

The 3 months correlation between Bank and Applied is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Applied Molecular TransportInc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Molecular 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 Applied Molecular. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Molecular has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Applied Molecular go up and down completely randomly.

Pair Corralation between Bank Mandiri and Applied Molecular

If you would invest  26.00  in Applied Molecular TransportInc on March 1, 2024 and sell it today you would earn a total of  0.00  from holding Applied Molecular TransportInc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	4.76%
Values	Daily Returns

Bank Mandiri Persero  vs.  Applied Molecular TransportInc

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 June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Applied Molecular

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Applied Molecular TransportInc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Applied Molecular is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Bank Mandiri and Applied Molecular

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

The idea behind Bank Mandiri Persero and Applied Molecular TransportInc 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.