Correlation Between Bank Panin and PT Bukalapak

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

By analyzing existing cross correlation between Bank Panin Syariah and PT Bukalapak, you can compare the effects of market volatilities on Bank Panin and PT Bukalapak 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 Bank Panin with a short position of PT Bukalapak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Panin and PT Bukalapak.

Diversification Opportunities for Bank Panin and PT Bukalapak

0.43

Correlation Coefficient

Bank Panin  PT Bukalapak

Very weak diversification

The 3 months correlation between Bank and BUKA is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Bank Panin Syariah and PT Bukalapak in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bukalapak and Bank Panin 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 Bank Panin Syariah are associated (or correlated) with PT Bukalapak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bukalapak has no effect on the direction of Bank Panin i.e., Bank Panin and PT Bukalapak go up and down completely randomly.

Pair Corralation between Bank Panin and PT Bukalapak

Assuming the 90 days trading horizon Bank Panin Syariah is expected to under-perform the PT Bukalapak. But the stock apears to be less risky and, when comparing its historical volatility, Bank Panin Syariah is 2.63 times less risky than PT Bukalapak. The stock trades about -0.03 of its potential returns per unit of risk. The PT Bukalapak is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  11,700  in PT Bukalapak on September 12, 2024 and sell it today you would earn a total of  1,300  from holding PT Bukalapak or generate 11.11% return on investment over 90 days.

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

Bank Panin Syariah  vs.  PT Bukalapak

Bank Panin Syariah

Risk-Adjusted Performance

0 of 100

Very Weak

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

PT Bukalapak

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PT Bukalapak are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, PT Bukalapak disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bank Panin and PT Bukalapak

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

The idea behind Bank Panin Syariah and PT Bukalapak 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.