Correlation Between Paninvest Tbk and Trias Sentosa

Can any of the company-specific risk be diversified away by investing in both Paninvest Tbk and Trias Sentosa 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 Paninvest Tbk and Trias Sentosa into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Paninvest Tbk and Trias Sentosa

0.04

Correlation Coefficient

Paninvest Tbk  Trias Sentosa

Significant diversification

The 3 months correlation between Paninvest and Trias is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Paninvest Tbk and Trias Sentosa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trias Sentosa Tbk and Paninvest Tbk 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 Paninvest Tbk are associated (or correlated) with Trias Sentosa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trias Sentosa Tbk has no effect on the direction of Paninvest Tbk i.e., Paninvest Tbk and Trias Sentosa go up and down completely randomly.

Pair Corralation between Paninvest Tbk and Trias Sentosa

Assuming the 90 days trading horizon Paninvest Tbk is expected to generate 2.01 times more return on investment than Trias Sentosa. However, Paninvest Tbk is 2.01 times more volatile than Trias Sentosa Tbk. It trades about 0.12 of its potential returns per unit of risk. Trias Sentosa Tbk is currently generating about 0.0 per unit of risk. If you would invest  97,500  in Paninvest Tbk on September 13, 2024 and sell it today you would earn a total of  20,500  from holding Paninvest Tbk or generate 21.03% return on investment over 90 days.

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

Paninvest Tbk  vs.  Trias Sentosa Tbk

Paninvest Tbk

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Paninvest Tbk are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Paninvest Tbk disclosed solid returns over the last few months and may actually be approaching a breakup point.

Trias Sentosa Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trias Sentosa Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Trias Sentosa 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 Paninvest Tbk and Trias Sentosa

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

The idea behind Paninvest Tbk and Trias Sentosa 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..