Correlation Between Cipta Selera and Panin Financial

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

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

Diversification Opportunities for Cipta Selera and Panin Financial

-0.53

Correlation Coefficient

Cipta Selera  Panin Financial

Excellent diversification

The 3 months correlation between Cipta and Panin is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Cipta Selera Murni 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 Cipta Selera 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 Cipta Selera Murni 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 Cipta Selera i.e., Cipta Selera and Panin Financial go up and down completely randomly.

Pair Corralation between Cipta Selera and Panin Financial

Assuming the 90 days trading horizon Cipta Selera Murni is expected to generate 0.51 times more return on investment than Panin Financial. However, Cipta Selera Murni is 1.97 times less risky than Panin Financial. It trades about 0.4 of its potential returns per unit of risk. Panin Financial Tbk is currently generating about -0.34 per unit of risk. If you would invest  302,000  in Cipta Selera Murni on October 11, 2024 and sell it today you would earn a total of  22,000  from holding Cipta Selera Murni or generate 7.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	94.74%
Values	Daily Returns

Cipta Selera Murni  vs.  Panin Financial Tbk

Cipta Selera Murni

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cipta Selera Murni are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Cipta Selera disclosed solid returns over the last few months and may actually be approaching a breakup point.

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 quite persistent forward-looking signals, Panin Financial 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 Cipta Selera and Panin Financial

The main advantage of trading using opposite Cipta Selera and Panin Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cipta Selera 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 Cipta Selera Murni 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.