Correlation Between PT Bank and WESCO International

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

Diversification Opportunities for PT Bank and WESCO International

-0.37

Correlation Coefficient

PT Bank  WESCO International

Very good diversification

The 3 months correlation between PQ9 and WESCO is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Mandiri and WESCO International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WESCO International 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 WESCO International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WESCO International has no effect on the direction of PT Bank i.e., PT Bank and WESCO International go up and down completely randomly.

Pair Corralation between PT Bank and WESCO International

Assuming the 90 days horizon PT Bank is expected to generate 1.01 times less return on investment than WESCO International. In addition to that, PT Bank is 3.83 times more volatile than WESCO International. It trades about 0.05 of its total potential returns per unit of risk. WESCO International is currently generating about 0.21 per unit of volatility. If you would invest  13,565  in WESCO International on April 24, 2025 and sell it today you would earn a total of  4,035  from holding WESCO International or generate 29.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

PT Bank Mandiri  vs.  WESCO International

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.

WESCO International

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in WESCO International are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, WESCO International reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Bank and WESCO International

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

The idea behind PT Bank Mandiri and WESCO International 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.