Correlation Between CONCORDIA FINL and PT Bank

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Can any of the company-specific risk be diversified away by investing in both CONCORDIA FINL and PT Bank 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 CONCORDIA FINL and PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CONCORDIA FINL GROUP and PT Bank Mandiri, you can compare the effects of market volatilities on CONCORDIA FINL and PT Bank 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 CONCORDIA FINL with a short position of PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of CONCORDIA FINL and PT Bank.

Diversification Opportunities for CONCORDIA FINL and PT Bank

-0.61
  Correlation Coefficient

Excellent diversification

The 3 months correlation between CONCORDIA and PQ9 is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding CONCORDIA FINL GROUP and PT Bank Mandiri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Mandiri and CONCORDIA FINL 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 CONCORDIA FINL GROUP are associated (or correlated) with PT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Mandiri has no effect on the direction of CONCORDIA FINL i.e., CONCORDIA FINL and PT Bank go up and down completely randomly.

Pair Corralation between CONCORDIA FINL and PT Bank

Assuming the 90 days horizon CONCORDIA FINL GROUP is expected to generate 0.34 times more return on investment than PT Bank. However, CONCORDIA FINL GROUP is 2.97 times less risky than PT Bank. It trades about 0.02 of its potential returns per unit of risk. PT Bank Mandiri is currently generating about 0.0 per unit of risk. If you would invest  530.00  in CONCORDIA FINL GROUP on October 19, 2024 and sell it today you would earn a total of  5.00  from holding CONCORDIA FINL GROUP or generate 0.94% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

CONCORDIA FINL GROUP  vs.  PT Bank Mandiri

 Performance 
       Timeline  
CONCORDIA FINL GROUP 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in CONCORDIA FINL GROUP are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CONCORDIA FINL reported solid returns over the last few months and may actually be approaching a breakup point.
PT Bank Mandiri 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days PT Bank Mandiri has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain 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.

CONCORDIA FINL and PT Bank Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CONCORDIA FINL and PT Bank

The main advantage of trading using opposite CONCORDIA FINL and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CONCORDIA FINL position performs unexpectedly, PT Bank 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 PT Bank will offset losses from the drop in PT Bank's long position.
The idea behind CONCORDIA FINL GROUP and PT Bank Mandiri 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

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