Correlation Between Asuransi Kresna and Panin Sekuritas

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

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

Diversification Opportunities for Asuransi Kresna and Panin Sekuritas

0.43

Correlation Coefficient

Asuransi Kresna  Panin Sekuritas

Very weak diversification

The 3 months correlation between Asuransi and Panin is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Asuransi Kresna Mitra and Panin Sekuritas Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panin Sekuritas Tbk and Asuransi Kresna 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 Kresna Mitra are associated (or correlated) with Panin Sekuritas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panin Sekuritas Tbk has no effect on the direction of Asuransi Kresna i.e., Asuransi Kresna and Panin Sekuritas go up and down completely randomly.

Pair Corralation between Asuransi Kresna and Panin Sekuritas

Assuming the 90 days trading horizon Asuransi Kresna Mitra is expected to generate 8.47 times more return on investment than Panin Sekuritas. However, Asuransi Kresna is 8.47 times more volatile than Panin Sekuritas Tbk. It trades about 0.06 of its potential returns per unit of risk. Panin Sekuritas Tbk is currently generating about -0.02 per unit of risk. If you would invest  1,000.00  in Asuransi Kresna Mitra on September 29, 2024 and sell it today you would earn a total of  100.00  from holding Asuransi Kresna Mitra or generate 10.0% return on investment over 90 days.

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

Asuransi Kresna Mitra  vs.  Panin Sekuritas Tbk

Asuransi Kresna Mitra

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Asuransi Kresna Mitra are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Asuransi Kresna disclosed solid returns over the last few months and may actually be approaching a breakup point.

Panin Sekuritas Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Asuransi Kresna and Panin Sekuritas

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

The idea behind Asuransi Kresna Mitra and Panin Sekuritas 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.