Correlation Between Bank Amar and Mahaka Radio

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

By analyzing existing cross correlation between Bank Amar Indonesia and Mahaka Radio Integra, you can compare the effects of market volatilities on Bank Amar and Mahaka Radio 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 Amar with a short position of Mahaka Radio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Amar and Mahaka Radio.

Diversification Opportunities for Bank Amar and Mahaka Radio

-0.11

Correlation Coefficient

Bank Amar  Mahaka Radio

Good diversification

The 3 months correlation between Bank and Mahaka is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Bank Amar Indonesia and Mahaka Radio Integra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mahaka Radio Integra and Bank Amar 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 Amar Indonesia are associated (or correlated) with Mahaka Radio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mahaka Radio Integra has no effect on the direction of Bank Amar i.e., Bank Amar and Mahaka Radio go up and down completely randomly.

Pair Corralation between Bank Amar and Mahaka Radio

Assuming the 90 days trading horizon Bank Amar Indonesia is expected to generate 1.18 times more return on investment than Mahaka Radio. However, Bank Amar is 1.18 times more volatile than Mahaka Radio Integra. It trades about 0.14 of its potential returns per unit of risk. Mahaka Radio Integra is currently generating about -0.35 per unit of risk. If you would invest  16,140  in Bank Amar Indonesia on April 25, 2025 and sell it today you would earn a total of  6,260  from holding Bank Amar Indonesia or generate 38.79% return on investment over 90 days.

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

Bank Amar Indonesia  vs.  Mahaka Radio Integra

Bank Amar Indonesia

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bank Amar Indonesia are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Bank Amar disclosed solid returns over the last few months and may actually be approaching a breakup point.

Mahaka Radio Integra

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mahaka Radio Integra has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in August 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Bank Amar and Mahaka Radio

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

The idea behind Bank Amar Indonesia and Mahaka Radio Integra 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.

Check out your portfolio center.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..