Correlation Between Bank Pan and Indo Oil
Can any of the company-specific risk be diversified away by investing in both Bank Pan and Indo Oil 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 Bank Pan and Indo Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Pan Indonesia and Indo Oil Perkasa, you can compare the effects of market volatilities on Bank Pan and Indo Oil 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 Bank Pan with a short position of Indo Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Pan and Indo Oil.
Diversification Opportunities for Bank Pan and Indo Oil
Very good diversification
The 3 months correlation between Bank and Indo is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Bank Pan Indonesia and Indo Oil Perkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indo Oil Perkasa and Bank Pan 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 Bank Pan Indonesia are associated (or correlated) with Indo Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indo Oil Perkasa has no effect on the direction of Bank Pan i.e., Bank Pan and Indo Oil go up and down completely randomly.
Pair Corralation between Bank Pan and Indo Oil
Assuming the 90 days trading horizon Bank Pan Indonesia is expected to generate 2.2 times more return on investment than Indo Oil. However, Bank Pan is 2.2 times more volatile than Indo Oil Perkasa. It trades about 0.16 of its potential returns per unit of risk. Indo Oil Perkasa is currently generating about -0.03 per unit of risk. If you would invest 147,000 in Bank Pan Indonesia on September 15, 2024 and sell it today you would earn a total of 49,500 from holding Bank Pan Indonesia or generate 33.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Bank Pan Indonesia vs. Indo Oil Perkasa
Performance |
Timeline |
Bank Pan Indonesia |
Indo Oil Perkasa |
Bank Pan and Indo Oil Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank Pan and Indo Oil
The main advantage of trading using opposite Bank Pan and Indo Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Pan position performs unexpectedly, Indo Oil 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 Indo Oil will offset losses from the drop in Indo Oil's long position.Bank Pan vs. Paninvest Tbk | Bank Pan vs. Maskapai Reasuransi Indonesia | Bank Pan vs. Panin Sekuritas Tbk | Bank Pan vs. Wahana Ottomitra Multiartha |
Indo Oil vs. Sentra Food Indonesia | Indo Oil vs. Garudafood Putra Putri | Indo Oil vs. Wijaya Karya Bangunan | Indo Oil vs. Mitrabara Adiperdana PT |
Check out your portfolio center.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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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