Correlation Between Bank Mandiri and Durect

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

Diversification Opportunities for Bank Mandiri and Durect

-0.72

Correlation Coefficient

Bank Mandiri  Durect

Pay attention - limited upside

The 3 months correlation between Bank and Durect is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Durect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Durect 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 Durect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Durect has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Durect go up and down completely randomly.

Pair Corralation between Bank Mandiri and Durect

Assuming the 90 days horizon Bank Mandiri Persero is expected to generate 0.32 times more return on investment than Durect. However, Bank Mandiri Persero is 3.1 times less risky than Durect. It trades about 0.01 of its potential returns per unit of risk. Durect is currently generating about -0.02 per unit of risk. If you would invest  1,194  in Bank Mandiri Persero on February 8, 2025 and sell it today you would lose (41.00) from holding Bank Mandiri Persero or give up 3.43% of portfolio value over 90 days.

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

Bank Mandiri Persero  vs.  Durect

Bank Mandiri Persero

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bank Mandiri Persero are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Bank Mandiri may actually be approaching a critical reversion point that can send shares even higher in June 2025.

Durect

Risk-Adjusted Performance

Very Weak

Over the last 90 days Durect has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Bank Mandiri and Durect

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

The idea behind Bank Mandiri Persero and Durect 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.