Correlation Between Asuransi Multi and Panin Financial

Can any of the company-specific risk be diversified away by investing in both Asuransi Multi and Panin Financial 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 Asuransi Multi and Panin Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Asuransi Multi Artha and Panin Financial Tbk, you can compare the effects of market volatilities on Asuransi Multi and Panin Financial 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 Asuransi Multi with a short position of Panin Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asuransi Multi and Panin Financial.

Diversification Opportunities for Asuransi Multi and Panin Financial

0.03

Correlation Coefficient

Asuransi Multi  Panin Financial

Significant diversification

The 3 months correlation between Asuransi and Panin is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Asuransi Multi Artha and Panin Financial Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panin Financial Tbk and Asuransi Multi 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 Asuransi Multi Artha are associated (or correlated) with Panin Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panin Financial Tbk has no effect on the direction of Asuransi Multi i.e., Asuransi Multi and Panin Financial go up and down completely randomly.

Pair Corralation between Asuransi Multi and Panin Financial

Assuming the 90 days trading horizon Asuransi Multi Artha is expected to under-perform the Panin Financial. But the stock apears to be less risky and, when comparing its historical volatility, Asuransi Multi Artha is 3.48 times less risky than Panin Financial. The stock trades about -0.07 of its potential returns per unit of risk. The Panin Financial Tbk is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  42,000  in Panin Financial Tbk on September 13, 2024 and sell it today you would earn a total of  6,200  from holding Panin Financial Tbk or generate 14.76% return on investment over 90 days.

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

Asuransi Multi Artha  vs.  Panin Financial Tbk

Asuransi Multi Artha

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asuransi Multi Artha has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Asuransi Multi is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Panin Financial Tbk

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Panin Financial Tbk are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Panin Financial disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Asuransi Multi and Panin Financial

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

The idea behind Asuransi Multi Artha and Panin Financial Tbk 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.