Correlation Between Panin Sekuritas and Yulie Sekurindo

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

Diversification Opportunities for Panin Sekuritas and Yulie Sekurindo

0.26

Correlation Coefficient

Panin Sekuritas  Yulie Sekurindo

Modest diversification

The 3 months correlation between Panin and Yulie is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Panin Sekuritas Tbk and Yulie Sekurindo Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yulie Sekurindo 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 Yulie Sekurindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yulie Sekurindo Tbk has no effect on the direction of Panin Sekuritas i.e., Panin Sekuritas and Yulie Sekurindo go up and down completely randomly.

Pair Corralation between Panin Sekuritas and Yulie Sekurindo

Assuming the 90 days trading horizon Panin Sekuritas Tbk is expected to under-perform the Yulie Sekurindo. But the stock apears to be less risky and, when comparing its historical volatility, Panin Sekuritas Tbk is 1.09 times less risky than Yulie Sekurindo. The stock trades about -0.16 of its potential returns per unit of risk. The Yulie Sekurindo Tbk is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  273,000  in Yulie Sekurindo Tbk on December 30, 2024 and sell it today you would lose (3,000) from holding Yulie Sekurindo Tbk or give up 1.1% 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.  Yulie Sekurindo 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.

Yulie Sekurindo Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Yulie Sekurindo Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Yulie Sekurindo 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 Yulie Sekurindo

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

The idea behind Panin Sekuritas Tbk and Yulie Sekurindo 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.