Correlation Between Panin Sekuritas and Mandala Multifinance

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

Diversification Opportunities for Panin Sekuritas and Mandala Multifinance

0.33

Correlation Coefficient

Panin Sekuritas  Mandala Multifinance

Weak diversification

The 3 months correlation between Panin and Mandala is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Panin Sekuritas Tbk and Mandala Multifinance Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mandala Multifinance Tbk 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 Mandala Multifinance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mandala Multifinance Tbk has no effect on the direction of Panin Sekuritas i.e., Panin Sekuritas and Mandala Multifinance go up and down completely randomly.

Pair Corralation between Panin Sekuritas and Mandala Multifinance

Assuming the 90 days trading horizon Panin Sekuritas Tbk is expected to under-perform the Mandala Multifinance. But the stock apears to be less risky and, when comparing its historical volatility, Panin Sekuritas Tbk is 5.98 times less risky than Mandala Multifinance. The stock trades about -0.25 of its potential returns per unit of risk. The Mandala Multifinance Tbk is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  335,000  in Mandala Multifinance Tbk on December 2, 2024 and sell it today you would lose (38,000) from holding Mandala Multifinance Tbk or give up 11.34% of portfolio value over 90 days.

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

Panin Sekuritas Tbk  vs.  Mandala Multifinance Tbk

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.

Mandala Multifinance Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mandala Multifinance 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 Panin Sekuritas and Mandala Multifinance

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

The idea behind Panin Sekuritas Tbk and Mandala Multifinance 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.