Correlation Between Archi Indonesia and Bank Panin
Can any of the company-specific risk be diversified away by investing in both Archi Indonesia and Bank Panin 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 Archi Indonesia and Bank Panin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Archi Indonesia Tbk and Bank Panin Syariah, you can compare the effects of market volatilities on Archi Indonesia and Bank Panin 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 Archi Indonesia with a short position of Bank Panin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Archi Indonesia and Bank Panin.
Diversification Opportunities for Archi Indonesia and Bank Panin
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Archi and Bank is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Archi Indonesia Tbk and Bank Panin Syariah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Panin Syariah and Archi Indonesia 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 Archi Indonesia Tbk are associated (or correlated) with Bank Panin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Panin Syariah has no effect on the direction of Archi Indonesia i.e., Archi Indonesia and Bank Panin go up and down completely randomly.
Pair Corralation between Archi Indonesia and Bank Panin
Assuming the 90 days trading horizon Archi Indonesia Tbk is expected to generate 1.6 times more return on investment than Bank Panin. However, Archi Indonesia is 1.6 times more volatile than Bank Panin Syariah. It trades about -0.01 of its potential returns per unit of risk. Bank Panin Syariah is currently generating about -0.03 per unit of risk. If you would invest 33,600 in Archi Indonesia Tbk on August 28, 2024 and sell it today you would lose (7,000) from holding Archi Indonesia Tbk or give up 20.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Archi Indonesia Tbk vs. Bank Panin Syariah
Performance |
| Timeline |
| Archi Indonesia Tbk |
| Bank Panin Syariah |
Archi Indonesia and Bank Panin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Archi Indonesia and Bank Panin
The main advantage of trading using opposite Archi Indonesia and Bank Panin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Archi Indonesia position performs unexpectedly, Bank Panin 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 Panin will offset losses from the drop in Bank Panin's long position.| Archi Indonesia vs. Triputra Agro Persada | Archi Indonesia vs. Berkah Beton Sadaya | Archi Indonesia vs. PAM Mineral Tbk | Archi Indonesia vs. PT Bukalapak |
| Bank Panin vs. Bank Windu Kentjana | Bank Panin vs. Bank Mnc Internasional | Bank Panin vs. Bank Ganesha Tbk | Bank Panin vs. Bank Pan Indonesia |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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