Correlation Between Lion Metal and Panin Financial
Can any of the company-specific risk be diversified away by investing in both Lion Metal and Panin Financial 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 Lion Metal and Panin Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion Metal Works and Panin Financial Tbk, you can compare the effects of market volatilities on Lion Metal and Panin Financial 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 Lion Metal with a short position of Panin Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Metal and Panin Financial.
Diversification Opportunities for Lion Metal and Panin Financial
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lion and Panin is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Lion Metal Works and Panin Financial Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panin Financial Tbk and Lion Metal 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 Lion Metal Works are associated (or correlated) with Panin Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panin Financial Tbk has no effect on the direction of Lion Metal i.e., Lion Metal and Panin Financial go up and down completely randomly.
Pair Corralation between Lion Metal and Panin Financial
Assuming the 90 days trading horizon Lion Metal Works is expected to under-perform the Panin Financial. In addition to that, Lion Metal is 1.78 times more volatile than Panin Financial Tbk. It trades about -0.17 of its total potential returns per unit of risk. Panin Financial Tbk is currently generating about -0.16 per unit of volatility. If you would invest 47,600 in Panin Financial Tbk on September 1, 2024 and sell it today you would lose (4,600) from holding Panin Financial Tbk or give up 9.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion Metal Works vs. Panin Financial Tbk
Performance |
| Timeline |
| Lion Metal Works |
| Panin Financial Tbk |
Lion Metal and Panin Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion Metal and Panin Financial
The main advantage of trading using opposite Lion Metal and Panin Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Metal position performs unexpectedly, Panin Financial 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 Panin Financial will offset losses from the drop in Panin Financial's long position.| Lion Metal vs. Lionmesh Prima Tbk | Lion Metal vs. Pelangi Indah Canindo | Lion Metal vs. Indal Aluminium Industry | Lion Metal vs. Intanwijaya Internasional Tbk |
| Panin Financial vs. Bank Pan Indonesia | Panin Financial vs. Paninvest Tbk | Panin Financial vs. Kawasan Industri Jababeka | Panin Financial vs. Global Mediacom Tbk |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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