Correlation Between Bank Mandiri and Dialight Plc

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

Diversification Opportunities for Bank Mandiri and Dialight Plc

-0.46
  Correlation Coefficient

Very good diversification

The 3 months correlation between Bank and Dialight is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mandiri Persero and Dialight plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dialight plc 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 Dialight Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dialight plc has no effect on the direction of Bank Mandiri i.e., Bank Mandiri and Dialight Plc go up and down completely randomly.

Pair Corralation between Bank Mandiri and Dialight Plc

Assuming the 90 days horizon Bank Mandiri Persero is expected to under-perform the Dialight Plc. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Mandiri Persero is 1.04 times less risky than Dialight Plc. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Dialight plc is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  260.00  in Dialight plc on August 15, 2025 and sell it today you would earn a total of  83.00  from holding Dialight plc or generate 31.92% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Bank Mandiri Persero  vs.  Dialight plc

 Performance 
       Timeline  
Bank Mandiri Persero 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Bank Mandiri Persero has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Bank Mandiri is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
Dialight plc 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Dialight plc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, Dialight Plc reported solid returns over the last few months and may actually be approaching a breakup point.

Bank Mandiri and Dialight Plc Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bank Mandiri and Dialight Plc

The main advantage of trading using opposite Bank Mandiri and Dialight Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mandiri position performs unexpectedly, Dialight Plc 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 Dialight Plc will offset losses from the drop in Dialight Plc's long position.
The idea behind Bank Mandiri Persero and Dialight plc 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.

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