Correlation Between Trimegah Securities and Paninvest Tbk

Can any of the company-specific risk be diversified away by investing in both Trimegah Securities and Paninvest Tbk 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 Trimegah Securities and Paninvest Tbk into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Trimegah Securities and Paninvest Tbk

0.56

Correlation Coefficient

Trimegah Securities  Paninvest Tbk

Very weak diversification

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

Pair Corralation between Trimegah Securities and Paninvest Tbk

Assuming the 90 days trading horizon Trimegah Securities Tbk is expected to generate 0.79 times more return on investment than Paninvest Tbk. However, Trimegah Securities Tbk is 1.27 times less risky than Paninvest Tbk. It trades about 0.19 of its potential returns per unit of risk. Paninvest Tbk is currently generating about 0.07 per unit of risk. If you would invest  26,400  in Trimegah Securities Tbk on September 3, 2024 and sell it today you would earn a total of  8,000  from holding Trimegah Securities Tbk or generate 30.3% return on investment over 90 days.

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

Trimegah Securities Tbk  vs.  Paninvest Tbk

Trimegah Securities Tbk

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Trimegah Securities Tbk are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Trimegah Securities disclosed solid returns over the last few months and may actually be approaching a breakup point.

Paninvest Tbk

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Paninvest Tbk are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Paninvest Tbk disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Trimegah Securities and Paninvest Tbk

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

The idea behind Trimegah Securities Tbk and Paninvest Tbk 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.