Correlation Between Bank Pan and Aman Agrindo
Can any of the company-specific risk be diversified away by investing in both Bank Pan and Aman Agrindo 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 Bank Pan and Aman Agrindo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Pan Indonesia and Aman Agrindo, you can compare the effects of market volatilities on Bank Pan and Aman Agrindo 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 Bank Pan with a short position of Aman Agrindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Pan and Aman Agrindo.
Diversification Opportunities for Bank Pan and Aman Agrindo
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Aman is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Bank Pan Indonesia and Aman Agrindo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aman Agrindo and Bank Pan 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 Bank Pan Indonesia are associated (or correlated) with Aman Agrindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aman Agrindo has no effect on the direction of Bank Pan i.e., Bank Pan and Aman Agrindo go up and down completely randomly.
Pair Corralation between Bank Pan and Aman Agrindo
Assuming the 90 days trading horizon Bank Pan Indonesia is expected to under-perform the Aman Agrindo. In addition to that, Bank Pan is 1.7 times more volatile than Aman Agrindo. It trades about -0.15 of its total potential returns per unit of risk. Aman Agrindo is currently generating about -0.18 per unit of volatility. If you would invest 36,600 in Aman Agrindo on August 30, 2024 and sell it today you would lose (1,800) from holding Aman Agrindo or give up 4.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Pan Indonesia vs. Aman Agrindo
Performance |
| Timeline |
| Bank Pan Indonesia |
| Aman Agrindo |
Bank Pan and Aman Agrindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Pan and Aman Agrindo
The main advantage of trading using opposite Bank Pan and Aman Agrindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Pan position performs unexpectedly, Aman Agrindo 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 Aman Agrindo will offset losses from the drop in Aman Agrindo's long position.| Bank Pan vs. Bank Danamon Indonesia | Bank Pan vs. Bank Cimb Niaga | Bank Pan vs. Panin Financial Tbk | Bank Pan vs. Bank Maybank Indonesia |
| Aman Agrindo vs. Putra Rajawali Kencana | Aman Agrindo vs. Sinergi Inti Plastindo | Aman Agrindo vs. Karya Bersama Anugerah | Aman Agrindo vs. Jasnita Telekomindo 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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