Correlation Between Panin Sekuritas and Asuransi Dayin

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

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

Diversification Opportunities for Panin Sekuritas and Asuransi Dayin

0.75

Correlation Coefficient

Panin Sekuritas  Asuransi Dayin

Poor diversification

The 3 months correlation between Panin and Asuransi is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Panin Sekuritas Tbk and Asuransi Dayin Mitra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asuransi Dayin Mitra and Panin Sekuritas 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 Panin Sekuritas Tbk are associated (or correlated) with Asuransi Dayin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asuransi Dayin Mitra has no effect on the direction of Panin Sekuritas i.e., Panin Sekuritas and Asuransi Dayin go up and down completely randomly.

Pair Corralation between Panin Sekuritas and Asuransi Dayin

Assuming the 90 days trading horizon Panin Sekuritas Tbk is expected to generate 0.76 times more return on investment than Asuransi Dayin. However, Panin Sekuritas Tbk is 1.31 times less risky than Asuransi Dayin. It trades about -0.04 of its potential returns per unit of risk. Asuransi Dayin Mitra is currently generating about -0.05 per unit of risk. If you would invest  164,000  in Panin Sekuritas Tbk on October 21, 2024 and sell it today you would lose (3,500) from holding Panin Sekuritas Tbk or give up 2.13% of portfolio value over 90 days.

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

Panin Sekuritas Tbk  vs.  Asuransi Dayin Mitra

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.

Asuransi Dayin Mitra

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asuransi Dayin Mitra has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Asuransi Dayin 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 Panin Sekuritas and Asuransi Dayin

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

The idea behind Panin Sekuritas Tbk and Asuransi Dayin Mitra 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.