Correlation Between Trust Finance and Panca Global

Can any of the company-specific risk be diversified away by investing in both Trust Finance and Panca Global 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 Trust Finance and Panca Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Trust Finance and Panca Global

-0.11

Correlation Coefficient

Trust Finance  Panca Global

Good diversification

The 3 months correlation between Trust and Panca is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Trust Finance Indonesia and Panca Global Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panca Global Securities and Trust Finance 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 Trust Finance Indonesia are associated (or correlated) with Panca Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panca Global Securities has no effect on the direction of Trust Finance i.e., Trust Finance and Panca Global go up and down completely randomly.

Pair Corralation between Trust Finance and Panca Global

Assuming the 90 days trading horizon Trust Finance Indonesia is expected to under-perform the Panca Global. In addition to that, Trust Finance is 2.65 times more volatile than Panca Global Securities. It trades about -0.05 of its total potential returns per unit of risk. Panca Global Securities is currently generating about 0.0 per unit of volatility. If you would invest  11,100  in Panca Global Securities on December 30, 2024 and sell it today you would lose (400.00) from holding Panca Global Securities or give up 3.6% of portfolio value over 90 days.

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

Trust Finance Indonesia  vs.  Panca Global Securities

Trust Finance Indonesia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Trust Finance Indonesia 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.

Panca Global Securities

Risk-Adjusted Performance

Very Weak

Over the last 90 days Panca Global Securities has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Panca Global 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 Trust Finance and Panca Global

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

The idea behind Trust Finance Indonesia and Panca Global Securities 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.