Correlation Between PT Bank and Intel

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

Diversification Opportunities for PT Bank and Intel

-0.28

Correlation Coefficient

PT Bank  Intel

Very good diversification

The 3 months correlation between PQ9 and Intel is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Mandiri and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel 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 Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of PT Bank i.e., PT Bank and Intel go up and down completely randomly.

Pair Corralation between PT Bank and Intel

Assuming the 90 days horizon PT Bank Mandiri is expected to generate 3.14 times more return on investment than Intel. However, PT Bank is 3.14 times more volatile than Intel. It trades about 0.06 of its potential returns per unit of risk. Intel is currently generating about 0.06 per unit of risk. If you would invest  23.00  in PT Bank Mandiri on April 23, 2025 and sell it today you would earn a total of  3.00  from holding PT Bank Mandiri or generate 13.04% return on investment over 90 days.

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

PT Bank Mandiri  vs.  Intel

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.

Intel

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile essential indicators, Intel may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with PT Bank and Intel

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

The idea behind PT Bank Mandiri and Intel 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.