Correlation Between Panin Sekuritas and Bank Negara

Can any of the company-specific risk be diversified away by investing in both Panin Sekuritas and Bank Negara 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 Bank Negara 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 Bank Negara Indonesia, you can compare the effects of market volatilities on Panin Sekuritas and Bank Negara 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 Bank Negara. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panin Sekuritas and Bank Negara.

Diversification Opportunities for Panin Sekuritas and Bank Negara

0.03

Correlation Coefficient

Panin Sekuritas  Bank Negara

Significant diversification

The 3 months correlation between Panin and Bank is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Panin Sekuritas Tbk and Bank Negara Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Negara Indonesia 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 Bank Negara. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Negara Indonesia has no effect on the direction of Panin Sekuritas i.e., Panin Sekuritas and Bank Negara go up and down completely randomly.

Pair Corralation between Panin Sekuritas and Bank Negara

Assuming the 90 days trading horizon Panin Sekuritas Tbk is expected to generate 0.28 times more return on investment than Bank Negara. However, Panin Sekuritas Tbk is 3.52 times less risky than Bank Negara. It trades about -0.2 of its potential returns per unit of risk. Bank Negara Indonesia is currently generating about -0.07 per unit of risk. If you would invest  164,000  in Panin Sekuritas Tbk on December 4, 2024 and sell it today you would lose (15,500) from holding Panin Sekuritas Tbk or give up 9.45% of portfolio value over 90 days.

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

Panin Sekuritas Tbk  vs.  Bank Negara Indonesia

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.

Bank Negara Indonesia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bank Negara Indonesia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Panin Sekuritas and Bank Negara

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

The idea behind Panin Sekuritas Tbk and Bank Negara Indonesia 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.