Correlation Between Paninvest Tbk and Malacca Trust

Can any of the company-specific risk be diversified away by investing in both Paninvest Tbk and Malacca Trust 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 Paninvest Tbk and Malacca Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Paninvest Tbk and Malacca Trust Wuwungan, you can compare the effects of market volatilities on Paninvest Tbk and Malacca Trust 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 Paninvest Tbk with a short position of Malacca Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paninvest Tbk and Malacca Trust.

Diversification Opportunities for Paninvest Tbk and Malacca Trust

0.82

Correlation Coefficient

Paninvest Tbk  Malacca Trust

Very poor diversification

The 3 months correlation between Paninvest and Malacca is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Paninvest Tbk and Malacca Trust Wuwungan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malacca Trust Wuwungan and Paninvest Tbk 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 Paninvest Tbk are associated (or correlated) with Malacca Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malacca Trust Wuwungan has no effect on the direction of Paninvest Tbk i.e., Paninvest Tbk and Malacca Trust go up and down completely randomly.

Pair Corralation between Paninvest Tbk and Malacca Trust

Assuming the 90 days trading horizon Paninvest Tbk is expected to under-perform the Malacca Trust. In addition to that, Paninvest Tbk is 1.12 times more volatile than Malacca Trust Wuwungan. It trades about -0.16 of its total potential returns per unit of risk. Malacca Trust Wuwungan is currently generating about -0.17 per unit of volatility. If you would invest  15,800  in Malacca Trust Wuwungan on December 23, 2024 and sell it today you would lose (2,500) from holding Malacca Trust Wuwungan or give up 15.82% of portfolio value over 90 days.

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

Paninvest Tbk  vs.  Malacca Trust Wuwungan

Paninvest Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Paninvest Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Malacca Trust Wuwungan

Risk-Adjusted Performance

Very Weak

Over the last 90 days Malacca Trust Wuwungan has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Paninvest Tbk and Malacca Trust

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

The idea behind Paninvest Tbk and Malacca Trust Wuwungan 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.