Correlation Between Optima Prima and Panin Financial
Can any of the company-specific risk be diversified away by investing in both Optima Prima 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 Optima Prima and Panin Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Optima Prima Metal and Panin Financial Tbk, you can compare the effects of market volatilities on Optima Prima 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 Optima Prima with a short position of Panin Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optima Prima and Panin Financial.
Diversification Opportunities for Optima Prima and Panin Financial
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Optima and Panin is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Optima Prima Metal 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 Optima Prima 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 Optima Prima Metal 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 Optima Prima i.e., Optima Prima and Panin Financial go up and down completely randomly.
Pair Corralation between Optima Prima and Panin Financial
Assuming the 90 days trading horizon Optima Prima Metal is expected to under-perform the Panin Financial. In addition to that, Optima Prima is 1.12 times more volatile than Panin Financial Tbk. It trades about -0.01 of its total potential returns per unit of risk. Panin Financial Tbk is currently generating about 0.04 per unit of volatility. If you would invest 32,400 in Panin Financial Tbk on August 31, 2024 and sell it today you would earn a total of 10,600 from holding Panin Financial Tbk or generate 32.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.78% |
| Values | Daily Returns |
Optima Prima Metal vs. Panin Financial Tbk
Performance |
| Timeline |
| Optima Prima Metal |
| Panin Financial Tbk |
Optima Prima and Panin Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Optima Prima and Panin Financial
The main advantage of trading using opposite Optima Prima and Panin Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optima Prima 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.| Optima Prima vs. Emdeki Utama Tbk | Optima Prima vs. Nusantara Almazia | Optima Prima vs. Sentral Mitra Informatika | Optima Prima vs. Darmi Bersaudara 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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