Correlation Between Kresna Graha and Panin Sekuritas

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

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

Diversification Opportunities for Kresna Graha and Panin Sekuritas

-0.05

Correlation Coefficient

Kresna Graha  Panin Sekuritas

Good diversification

The 3 months correlation between Kresna and Panin is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Kresna Graha Investama 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 Kresna Graha 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 Kresna Graha Investama 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 Kresna Graha i.e., Kresna Graha and Panin Sekuritas go up and down completely randomly.

Pair Corralation between Kresna Graha and Panin Sekuritas

Assuming the 90 days trading horizon Kresna Graha Investama is expected to generate 8.57 times more return on investment than Panin Sekuritas. However, Kresna Graha is 8.57 times more volatile than Panin Sekuritas Tbk. It trades about 0.14 of its potential returns per unit of risk. Panin Sekuritas Tbk is currently generating about -0.16 per unit of risk. If you would invest  600.00  in Kresna Graha Investama on December 30, 2024 and sell it today you would earn a total of  400.00  from holding Kresna Graha Investama or generate 66.67% return on investment over 90 days.

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

Kresna Graha Investama  vs.  Panin Sekuritas Tbk

Kresna Graha Investama

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kresna Graha Investama are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Kresna Graha disclosed solid returns over the last few months and may actually be approaching a breakup point.

Panin Sekuritas Tbk

Risk-Adjusted Performance

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 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 Kresna Graha and Panin Sekuritas

The main advantage of trading using opposite Kresna Graha and Panin Sekuritas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kresna Graha 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 Kresna Graha Investama 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.