Correlation Between Panin Sekuritas and Bank Bukopin

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

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

Diversification Opportunities for Panin Sekuritas and Bank Bukopin

-0.4

Correlation Coefficient

Panin Sekuritas  Bank Bukopin

Very good diversification

The 3 months correlation between Panin and Bank is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Panin Sekuritas Tbk and Bank Bukopin Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Bukopin Tbk and Panin Sekuritas 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 Sekuritas Tbk are associated (or correlated) with Bank Bukopin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Bukopin Tbk has no effect on the direction of Panin Sekuritas i.e., Panin Sekuritas and Bank Bukopin go up and down completely randomly.

Pair Corralation between Panin Sekuritas and Bank Bukopin

Assuming the 90 days trading horizon Panin Sekuritas Tbk is expected to under-perform the Bank Bukopin. But the stock apears to be less risky and, when comparing its historical volatility, Panin Sekuritas Tbk is 2.98 times less risky than Bank Bukopin. The stock trades about -0.13 of its potential returns per unit of risk. The Bank Bukopin Tbk is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  5,300  in Bank Bukopin Tbk on September 18, 2024 and sell it today you would earn a total of  100.00  from holding Bank Bukopin Tbk or generate 1.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Panin Sekuritas Tbk  vs.  Bank Bukopin Tbk

Panin Sekuritas Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Panin Sekuritas Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Bank Bukopin Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bank Bukopin 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 January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Panin Sekuritas and Bank Bukopin

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

The idea behind Panin Sekuritas Tbk and Bank Bukopin 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.