Correlation Between Panin Sekuritas and Bank Tabungan

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

Diversification Opportunities for Panin Sekuritas and Bank Tabungan

-0.48

Correlation Coefficient

Panin Sekuritas  Bank Tabungan

Very good diversification

The 3 months correlation between Panin and Bank is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Panin Sekuritas Tbk and Bank Tabungan Pensiunan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Tabungan Pensiunan 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 Tabungan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Tabungan Pensiunan has no effect on the direction of Panin Sekuritas i.e., Panin Sekuritas and Bank Tabungan go up and down completely randomly.

Pair Corralation between Panin Sekuritas and Bank Tabungan

Assuming the 90 days trading horizon Panin Sekuritas Tbk is expected to generate 0.37 times more return on investment than Bank Tabungan. However, Panin Sekuritas Tbk is 2.68 times less risky than Bank Tabungan. It trades about 0.02 of its potential returns per unit of risk. Bank Tabungan Pensiunan is currently generating about -0.08 per unit of risk. If you would invest  155,826  in Panin Sekuritas Tbk on September 12, 2024 and sell it today you would earn a total of  7,174  from holding Panin Sekuritas Tbk or generate 4.6% return on investment over 90 days.

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

Panin Sekuritas Tbk  vs.  Bank Tabungan Pensiunan

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.

Bank Tabungan Pensiunan

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bank Tabungan Pensiunan 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 Tabungan

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

The idea behind Panin Sekuritas Tbk and Bank Tabungan Pensiunan 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.