Correlation Between PT Bank and USWE SPORTS

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

By analyzing existing cross correlation between PT Bank Mandiri and USWE SPORTS AB, you can compare the effects of market volatilities on PT Bank and USWE SPORTS 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 PT Bank with a short position of USWE SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and USWE SPORTS.

Diversification Opportunities for PT Bank and USWE SPORTS

-0.39

Correlation Coefficient

PT Bank  USWE SPORTS

Very good diversification

The 3 months correlation between PQ9 and USWE is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Mandiri and USWE SPORTS AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USWE SPORTS AB and PT Bank 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 PT Bank Mandiri are associated (or correlated) with USWE SPORTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USWE SPORTS AB has no effect on the direction of PT Bank i.e., PT Bank and USWE SPORTS go up and down completely randomly.

Pair Corralation between PT Bank and USWE SPORTS

Assuming the 90 days horizon PT Bank Mandiri is expected to generate 1.71 times more return on investment than USWE SPORTS. However, PT Bank is 1.71 times more volatile than USWE SPORTS AB. It trades about 0.03 of its potential returns per unit of risk. USWE SPORTS AB is currently generating about 0.01 per unit of risk. If you would invest  27.00  in PT Bank Mandiri on April 24, 2025 and sell it today you would lose (1.00) from holding PT Bank Mandiri or give up 3.7% of portfolio value over 90 days.

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

PT Bank Mandiri  vs.  USWE SPORTS AB

PT Bank Mandiri

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PT Bank Mandiri are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, PT Bank reported solid returns over the last few months and may actually be approaching a breakup point.

USWE SPORTS AB

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in USWE SPORTS AB are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, USWE SPORTS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Bank and USWE SPORTS

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

The idea behind PT Bank Mandiri and USWE SPORTS AB 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 CEOs Directory module to screen CEOs from public companies around the world.