Correlation Between Panin Sekuritas and Lenox Pasifik

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

Diversification Opportunities for Panin Sekuritas and Lenox Pasifik

0.55

Correlation Coefficient

Panin Sekuritas  Lenox Pasifik

Very weak diversification

The 3 months correlation between Panin and Lenox is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Panin Sekuritas Tbk and Lenox Pasifik Investama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lenox Pasifik Investama 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 Lenox Pasifik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lenox Pasifik Investama has no effect on the direction of Panin Sekuritas i.e., Panin Sekuritas and Lenox Pasifik go up and down completely randomly.

Pair Corralation between Panin Sekuritas and Lenox Pasifik

Assuming the 90 days trading horizon Panin Sekuritas is expected to generate 4.89 times less return on investment than Lenox Pasifik. But when comparing it to its historical volatility, Panin Sekuritas Tbk is 7.64 times less risky than Lenox Pasifik. It trades about 0.02 of its potential returns per unit of risk. Lenox Pasifik Investama is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  5,700  in Lenox Pasifik Investama on September 4, 2024 and sell it today you would lose (300.00) from holding Lenox Pasifik Investama or give up 5.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Panin Sekuritas Tbk  vs.  Lenox Pasifik Investama

Panin Sekuritas Tbk

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Panin Sekuritas Tbk are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Lenox Pasifik Investama

Risk-Adjusted Performance

1 of 100

Weak

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

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

The idea behind Panin Sekuritas Tbk and Lenox Pasifik Investama 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.