Correlation Between Panin Financial and Ashmore Asset

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

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

Diversification Opportunities for Panin Financial and Ashmore Asset

0.63

Correlation Coefficient

Panin Financial  Ashmore Asset

Poor diversification

The 3 months correlation between Panin and Ashmore is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Panin Financial Tbk and Ashmore Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashmore Asset Management and Panin Financial 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 Panin Financial Tbk are associated (or correlated) with Ashmore Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashmore Asset Management has no effect on the direction of Panin Financial i.e., Panin Financial and Ashmore Asset go up and down completely randomly.

Pair Corralation between Panin Financial and Ashmore Asset

Assuming the 90 days trading horizon Panin Financial is expected to generate 4.25 times less return on investment than Ashmore Asset. But when comparing it to its historical volatility, Panin Financial Tbk is 1.42 times less risky than Ashmore Asset. It trades about 0.02 of its potential returns per unit of risk. Ashmore Asset Management is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  64,689  in Ashmore Asset Management on September 2, 2024 and sell it today you would earn a total of  5,311  from holding Ashmore Asset Management or generate 8.21% return on investment over 90 days.

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

Panin Financial Tbk  vs.  Ashmore Asset Management

Panin Financial Tbk

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Panin Financial Tbk are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Panin Financial is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Ashmore Asset Management

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ashmore Asset Management are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Ashmore Asset disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Panin Financial and Ashmore Asset

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

The idea behind Panin Financial Tbk and Ashmore Asset Management 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.

Check out your portfolio center.

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.