Correlation Between Panin Financial and Trias Sentosa

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

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

Diversification Opportunities for Panin Financial and Trias Sentosa

0.0

Correlation Coefficient

Panin Financial  Trias Sentosa

Pay attention - limited upside

The 3 months correlation between Panin and Trias is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Panin Financial 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 Panin Financial 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 Financial 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 Panin Financial i.e., Panin Financial and Trias Sentosa go up and down completely randomly.

Pair Corralation between Panin Financial and Trias Sentosa

Assuming the 90 days trading horizon Panin Financial Tbk is expected to generate 1.98 times more return on investment than Trias Sentosa. However, Panin Financial is 1.98 times more volatile than Trias Sentosa Tbk. It trades about 0.09 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  42,000  in Panin Financial Tbk on September 13, 2024 and sell it today you would earn a total of  6,200  from holding Panin Financial Tbk or generate 14.76% return on investment over 90 days.

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

Panin Financial Tbk  vs.  Trias Sentosa Tbk

Panin Financial Tbk

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Panin Financial Tbk are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Panin Financial 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 Panin Financial and Trias Sentosa

The main advantage of trading using opposite Panin Financial and Trias Sentosa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Panin Financial 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 Panin Financial 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.