Correlation Between Mandala Multifinance and Panin Sekuritas

Can any of the company-specific risk be diversified away by investing in both Mandala Multifinance and Panin Sekuritas 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 Mandala Multifinance and Panin Sekuritas into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Mandala Multifinance and Panin Sekuritas

0.51

Correlation Coefficient

Mandala Multifinance  Panin Sekuritas

Very weak diversification

The 3 months correlation between Mandala and Panin is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Mandala Multifinance Tbk and Panin Sekuritas Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panin Sekuritas Tbk and Mandala Multifinance 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 Mandala Multifinance Tbk are associated (or correlated) with Panin Sekuritas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panin Sekuritas Tbk has no effect on the direction of Mandala Multifinance i.e., Mandala Multifinance and Panin Sekuritas go up and down completely randomly.

Pair Corralation between Mandala Multifinance and Panin Sekuritas

Assuming the 90 days trading horizon Mandala Multifinance Tbk is expected to generate 9.23 times more return on investment than Panin Sekuritas. However, Mandala Multifinance is 9.23 times more volatile than Panin Sekuritas Tbk. It trades about 0.22 of its potential returns per unit of risk. Panin Sekuritas Tbk is currently generating about 0.03 per unit of risk. If you would invest  142,105  in Mandala Multifinance Tbk on September 13, 2024 and sell it today you would earn a total of  192,895  from holding Mandala Multifinance Tbk or generate 135.74% return on investment over 90 days.

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

Mandala Multifinance Tbk  vs.  Panin Sekuritas Tbk

Mandala Multifinance Tbk

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mandala Multifinance Tbk are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Mandala Multifinance disclosed solid returns over the last few months and may actually be approaching a breakup point.

Panin Sekuritas Tbk

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Panin Sekuritas Tbk are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Panin Sekuritas 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 Mandala Multifinance and Panin Sekuritas

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

The idea behind Mandala Multifinance Tbk and Panin Sekuritas 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.