Correlation Between Panca Global and Panin Sekuritas

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

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

Diversification Opportunities for Panca Global and Panin Sekuritas

0.27

Correlation Coefficient

Panca Global  Panin Sekuritas

Modest diversification

The 3 months correlation between Panca and Panin is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Panca Global Securities and Panin Sekuritas Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panin Sekuritas Tbk and Panca Global 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 Panca Global Securities are associated (or correlated) with Panin Sekuritas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panin Sekuritas Tbk has no effect on the direction of Panca Global i.e., Panca Global and Panin Sekuritas go up and down completely randomly.

Pair Corralation between Panca Global and Panin Sekuritas

Assuming the 90 days trading horizon Panca Global Securities is expected to generate 3.18 times more return on investment than Panin Sekuritas. However, Panca Global is 3.18 times more volatile than Panin Sekuritas Tbk. It trades about 0.0 of its potential returns per unit of risk. Panin Sekuritas Tbk is currently generating about -0.16 per unit of risk. If you would invest  11,100  in Panca Global Securities on December 30, 2024 and sell it today you would lose (400.00) from holding Panca Global Securities or give up 3.6% of portfolio value over 90 days.

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

Panca Global Securities  vs.  Panin Sekuritas Tbk

Panca Global Securities

Risk-Adjusted Performance

Very Weak

Over the last 90 days Panca Global Securities has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Panca Global is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

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.

Pair Trading with Panca Global and Panin Sekuritas

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

The idea behind Panca Global Securities and Panin Sekuritas 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.