Correlation Between Panin Financial and PT Data

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

Diversification Opportunities for Panin Financial and PT Data

0.73

Correlation Coefficient

Panin Financial  PT Data

Poor diversification

The 3 months correlation between Panin and ELIT is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Panin Financial Tbk and PT Data Sinergitama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Data Sinergitama 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 PT Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Data Sinergitama has no effect on the direction of Panin Financial i.e., Panin Financial and PT Data go up and down completely randomly.

Pair Corralation between Panin Financial and PT Data

Assuming the 90 days trading horizon Panin Financial Tbk is expected to under-perform the PT Data. In addition to that, Panin Financial is 1.62 times more volatile than PT Data Sinergitama. It trades about -0.1 of its total potential returns per unit of risk. PT Data Sinergitama is currently generating about 0.07 per unit of volatility. If you would invest  12,100  in PT Data Sinergitama on September 13, 2024 and sell it today you would earn a total of  300.00  from holding PT Data Sinergitama or generate 2.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Panin Financial Tbk  vs.  PT Data Sinergitama

Panin Financial Tbk

Risk-Adjusted Performance

4 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Panin Financial Tbk are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Panin Financial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

PT Data Sinergitama

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PT Data Sinergitama are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, PT Data disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Panin Financial and PT Data

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

The idea behind Panin Financial Tbk and PT Data Sinergitama 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.