Correlation Between Panin Sekuritas and Bank Mnc
Can any of the company-specific risk be diversified away by investing in both Panin Sekuritas and Bank Mnc 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 Sekuritas and Bank Mnc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Panin Sekuritas Tbk and Bank Mnc Internasional, you can compare the effects of market volatilities on Panin Sekuritas and Bank Mnc 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 Sekuritas with a short position of Bank Mnc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panin Sekuritas and Bank Mnc.
Diversification Opportunities for Panin Sekuritas and Bank Mnc
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Panin and Bank is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Panin Sekuritas Tbk and Bank Mnc Internasional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Mnc Internasional and Panin Sekuritas 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 Sekuritas Tbk are associated (or correlated) with Bank Mnc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Mnc Internasional has no effect on the direction of Panin Sekuritas i.e., Panin Sekuritas and Bank Mnc go up and down completely randomly.
Pair Corralation between Panin Sekuritas and Bank Mnc
Assuming the 90 days trading horizon Panin Sekuritas Tbk is expected to generate 0.36 times more return on investment than Bank Mnc. However, Panin Sekuritas Tbk is 2.81 times less risky than Bank Mnc. It trades about -0.03 of its potential returns per unit of risk. Bank Mnc Internasional is currently generating about -0.17 per unit of risk. If you would invest 163,500 in Panin Sekuritas Tbk on August 25, 2024 and sell it today you would lose (1,500) from holding Panin Sekuritas Tbk or give up 0.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Panin Sekuritas Tbk vs. Bank Mnc Internasional
Performance |
| Timeline |
| Panin Sekuritas Tbk |
| Bank Mnc Internasional |
Panin Sekuritas and Bank Mnc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Panin Sekuritas and Bank Mnc
The main advantage of trading using opposite Panin Sekuritas and Bank Mnc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Panin Sekuritas position performs unexpectedly, Bank Mnc 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 Mnc will offset losses from the drop in Bank Mnc's long position.The idea behind Panin Sekuritas Tbk and Bank Mnc Internasional 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.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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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