Correlation Between Panin Financial and Multi Hanna

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

Diversification Opportunities for Panin Financial and Multi Hanna

0.13

Correlation Coefficient

Panin Financial  Multi Hanna

Average diversification

The 3 months correlation between Panin and Multi is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Panin Financial Tbk and Multi Hanna Kreasindo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Hanna Kreasindo 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 Multi Hanna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Hanna Kreasindo has no effect on the direction of Panin Financial i.e., Panin Financial and Multi Hanna go up and down completely randomly.

Pair Corralation between Panin Financial and Multi Hanna

Assuming the 90 days trading horizon Panin Financial Tbk is expected to under-perform the Multi Hanna. In addition to that, Panin Financial is 1.09 times more volatile than Multi Hanna Kreasindo. It trades about -0.06 of its total potential returns per unit of risk. Multi Hanna Kreasindo is currently generating about 0.0 per unit of volatility. If you would invest  9,500  in Multi Hanna Kreasindo on December 30, 2024 and sell it today you would lose (300.00) from holding Multi Hanna Kreasindo or give up 3.16% of portfolio value over 90 days.

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

Panin Financial Tbk  vs.  Multi Hanna Kreasindo

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.

Multi Hanna Kreasindo

Risk-Adjusted Performance

Very Weak

Over the last 90 days Multi Hanna Kreasindo has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Multi Hanna 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 Panin Financial and Multi Hanna

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

The idea behind Panin Financial Tbk and Multi Hanna Kreasindo 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..