Correlation Between Panin Financial and Wintermar Offshore

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

Diversification Opportunities for Panin Financial and Wintermar Offshore

0.56

Correlation Coefficient

Panin Financial  Wintermar Offshore

Very weak diversification

The 3 months correlation between Panin and Wintermar is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Panin Financial Tbk and Wintermar Offshore Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wintermar Offshore Marine 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 Wintermar Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wintermar Offshore Marine has no effect on the direction of Panin Financial i.e., Panin Financial and Wintermar Offshore go up and down completely randomly.

Pair Corralation between Panin Financial and Wintermar Offshore

Assuming the 90 days trading horizon Panin Financial Tbk is expected to generate 1.4 times more return on investment than Wintermar Offshore. However, Panin Financial is 1.4 times more volatile than Wintermar Offshore Marine. It trades about 0.04 of its potential returns per unit of risk. Wintermar Offshore Marine is currently generating about -0.02 per unit of risk. If you would invest  44,400  in Panin Financial Tbk on September 16, 2024 and sell it today you would earn a total of  800.00  from holding Panin Financial Tbk or generate 1.8% return on investment over 90 days.

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

Panin Financial Tbk  vs.  Wintermar Offshore Marine

Panin Financial Tbk

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Panin Financial Tbk are ranked lower than 3 (%) 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.

Wintermar Offshore Marine

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wintermar Offshore Marine has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Wintermar Offshore 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 Wintermar Offshore

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

The idea behind Panin Financial Tbk and Wintermar Offshore Marine 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.