Correlation Between Samsung Electronics and BANK MANDIRI

Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and BANK MANDIRI 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 Samsung Electronics and BANK MANDIRI into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Samsung Electronics Co and BANK MANDIRI, you can compare the effects of market volatilities on Samsung Electronics and BANK MANDIRI 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 Samsung Electronics with a short position of BANK MANDIRI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and BANK MANDIRI.

Diversification Opportunities for Samsung Electronics and BANK MANDIRI

-0.4

Correlation Coefficient

Samsung Electronics  BANK MANDIRI

Very good diversification

The 3 months correlation between Samsung and BANK is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and BANK MANDIRI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK MANDIRI and Samsung Electronics 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 Samsung Electronics Co are associated (or correlated) with BANK MANDIRI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK MANDIRI has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and BANK MANDIRI go up and down completely randomly.

Pair Corralation between Samsung Electronics and BANK MANDIRI

Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.5 times more return on investment than BANK MANDIRI. However, Samsung Electronics Co is 1.98 times less risky than BANK MANDIRI. It trades about 0.18 of its potential returns per unit of risk. BANK MANDIRI is currently generating about -0.03 per unit of risk. If you would invest  85,600  in Samsung Electronics Co on April 25, 2025 and sell it today you would earn a total of  16,900  from holding Samsung Electronics Co or generate 19.74% return on investment over 90 days.

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

Samsung Electronics Co  vs.  BANK MANDIRI

Samsung Electronics

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Electronics Co are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Samsung Electronics unveiled solid returns over the last few months and may actually be approaching a breakup point.

BANK MANDIRI

Risk-Adjusted Performance

Very Weak

Over the last 90 days BANK MANDIRI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, BANK MANDIRI is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Samsung Electronics and BANK MANDIRI

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

The idea behind Samsung Electronics Co and BANK MANDIRI 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.