Correlation Between Panin Sekuritas and Bank Dinar

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

Diversification Opportunities for Panin Sekuritas and Bank Dinar

0.52

Correlation Coefficient

Panin Sekuritas  Bank Dinar

Very weak diversification

The 3 months correlation between Panin and Bank is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Panin Sekuritas Tbk and Bank Dinar Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Dinar Indonesia 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 Dinar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Dinar Indonesia has no effect on the direction of Panin Sekuritas i.e., Panin Sekuritas and Bank Dinar go up and down completely randomly.

Pair Corralation between Panin Sekuritas and Bank Dinar

Assuming the 90 days trading horizon Panin Sekuritas is expected to generate 72.66 times less return on investment than Bank Dinar. But when comparing it to its historical volatility, Panin Sekuritas Tbk is 10.47 times less risky than Bank Dinar. It trades about 0.02 of its potential returns per unit of risk. Bank Dinar Indonesia is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  8,500  in Bank Dinar Indonesia on September 16, 2024 and sell it today you would earn a total of  4,100  from holding Bank Dinar Indonesia or generate 48.24% return on investment over 90 days.

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

Panin Sekuritas Tbk  vs.  Bank Dinar Indonesia

Panin Sekuritas Tbk

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Panin Sekuritas Tbk are ranked lower than 1 (%) 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 Dinar Indonesia

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bank Dinar Indonesia are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Bank Dinar disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Panin Sekuritas and Bank Dinar

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

The idea behind Panin Sekuritas Tbk and Bank Dinar Indonesia 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.