Correlation Between Panca Global and Pollux Investasi

Can any of the company-specific risk be diversified away by investing in both Panca Global and Pollux Investasi 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 Pollux Investasi 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 Pollux Investasi Internasional, you can compare the effects of market volatilities on Panca Global and Pollux Investasi 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 Pollux Investasi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panca Global and Pollux Investasi.

Diversification Opportunities for Panca Global and Pollux Investasi

0.06

Correlation Coefficient

Panca Global  Pollux Investasi

Significant diversification

The 3 months correlation between Panca and Pollux is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Panca Global Securities and Pollux Investasi Internasional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pollux Investasi Int 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 Pollux Investasi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pollux Investasi Int has no effect on the direction of Panca Global i.e., Panca Global and Pollux Investasi go up and down completely randomly.

Pair Corralation between Panca Global and Pollux Investasi

Assuming the 90 days trading horizon Panca Global is expected to generate 2.32 times less return on investment than Pollux Investasi. In addition to that, Panca Global is 1.52 times more volatile than Pollux Investasi Internasional. It trades about 0.01 of its total potential returns per unit of risk. Pollux Investasi Internasional is currently generating about 0.03 per unit of volatility. If you would invest  76,000  in Pollux Investasi Internasional on September 3, 2024 and sell it today you would earn a total of  2,500  from holding Pollux Investasi Internasional or generate 3.29% return on investment over 90 days.

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

Panca Global Securities  vs.  Pollux Investasi Internasional

Panca Global Securities

Risk-Adjusted Performance

0 of 100

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.

Pollux Investasi Int

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pollux Investasi Internasional are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Pollux Investasi 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 Panca Global and Pollux Investasi

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

The idea behind Panca Global Securities and Pollux Investasi Internasional 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.