Correlation Between Tera Data and Panin Financial

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

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

Diversification Opportunities for Tera Data and Panin Financial

0.06

Correlation Coefficient

Tera Data  Panin Financial

Significant diversification

The 3 months correlation between Tera and Panin is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Tera Data Indonusa 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 Tera Data 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 Tera Data Indonusa 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 Tera Data i.e., Tera Data and Panin Financial go up and down completely randomly.

Pair Corralation between Tera Data and Panin Financial

Assuming the 90 days trading horizon Tera Data Indonusa is expected to under-perform the Panin Financial. In addition to that, Tera Data is 1.11 times more volatile than Panin Financial Tbk. It trades about -0.01 of its total potential returns per unit of risk. Panin Financial Tbk is currently generating about 0.02 per unit of volatility. If you would invest  40,000  in Panin Financial Tbk on October 26, 2024 and sell it today you would earn a total of  2,400  from holding Panin Financial Tbk or generate 6.0% return on investment over 90 days.

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

Tera Data Indonusa  vs.  Panin Financial Tbk

Tera Data Indonusa

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tera Data Indonusa are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Tera Data 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

0 of 100

Very Weak

Over the last 90 days Panin Financial Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Tera Data and Panin Financial

The main advantage of trading using opposite Tera Data and Panin Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tera Data 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 Tera Data Indonusa 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.

Check out your portfolio center.

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 Transaction History module to view history of all your transactions and understand their impact on performance.