Correlation Between Panin Financial and Tera Data

Can any of the company-specific risk be diversified away by investing in both Panin Financial and Tera Data 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 Tera Data 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 Tera Data Indonusa, you can compare the effects of market volatilities on Panin Financial and Tera Data 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 Tera Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panin Financial and Tera Data.

Diversification Opportunities for Panin Financial and Tera Data

0.67

Correlation Coefficient

Panin Financial  Tera Data

Poor diversification

The 3 months correlation between Panin and Tera is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Panin Financial Tbk and Tera Data Indonusa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tera Data Indonusa 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 Tera Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tera Data Indonusa has no effect on the direction of Panin Financial i.e., Panin Financial and Tera Data go up and down completely randomly.

Pair Corralation between Panin Financial and Tera Data

Assuming the 90 days trading horizon Panin Financial Tbk is expected to under-perform the Tera Data. In addition to that, Panin Financial is 1.27 times more volatile than Tera Data Indonusa. It trades about -0.22 of its total potential returns per unit of risk. Tera Data Indonusa is currently generating about -0.08 per unit of volatility. If you would invest  12,200  in Tera Data Indonusa on December 20, 2024 and sell it today you would lose (1,200) from holding Tera Data Indonusa or give up 9.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.28%
Values	Daily Returns

Panin Financial Tbk  vs.  Tera Data Indonusa

Panin Financial Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Panin Financial 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.

Tera Data Indonusa

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tera Data Indonusa has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Panin Financial and Tera Data

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

The idea behind Panin Financial Tbk and Tera Data Indonusa 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.