Correlation Between Paninvest Tbk and Bank Panin

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

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

Diversification Opportunities for Paninvest Tbk and Bank Panin

0.23

Correlation Coefficient

Paninvest Tbk  Bank Panin

Modest diversification

The 3 months correlation between Paninvest and Bank is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Paninvest Tbk and Bank Panin Syariah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Panin Syariah 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 Bank Panin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Panin Syariah has no effect on the direction of Paninvest Tbk i.e., Paninvest Tbk and Bank Panin go up and down completely randomly.

Pair Corralation between Paninvest Tbk and Bank Panin

Assuming the 90 days trading horizon Paninvest Tbk is expected to generate 1.97 times more return on investment than Bank Panin. However, Paninvest Tbk is 1.97 times more volatile than Bank Panin Syariah. It trades about 0.11 of its potential returns per unit of risk. Bank Panin Syariah is currently generating about -0.03 per unit of risk. If you would invest  98,500  in Paninvest Tbk on September 12, 2024 and sell it today you would earn a total of  19,000  from holding Paninvest Tbk or generate 19.29% return on investment over 90 days.

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

Paninvest Tbk  vs.  Bank Panin Syariah

Paninvest Tbk

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Paninvest Tbk are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Paninvest Tbk disclosed solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Paninvest Tbk and Bank Panin

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

The idea behind Paninvest Tbk and Bank Panin Syariah 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.