Correlation Between Bank Mandiri and Argosy Property

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

Diversification Opportunities for Bank Mandiri and Argosy Property

-0.49

Correlation Coefficient

Bank Mandiri  Argosy Property

Very good diversification

The 3 months correlation between Bank and Argosy is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Argosy Property Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argosy Property 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 Argosy Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argosy Property has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Argosy Property go up and down completely randomly.

Pair Corralation between Bank Mandiri and Argosy Property

Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the Argosy Property. In addition to that, Bank Mandiri is 10.79 times more volatile than Argosy Property Limited. It trades about -0.04 of its total potential returns per unit of risk. Argosy Property Limited is currently generating about 0.12 per unit of volatility. If you would invest  67.00  in Argosy Property Limited on September 12, 2024 and sell it today you would earn a total of  2.00  from holding Argosy Property Limited or generate 2.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.92%
Values	Daily Returns

Bank Mandiri Persero  vs.  Argosy Property Limited

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 latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Argosy Property

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Argosy Property Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Argosy Property is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Bank Mandiri and Argosy Property

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

The idea behind Bank Mandiri Persero and Argosy Property Limited 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.