Correlation Between Bank Pan and Pioneerindo Gourmet
Can any of the company-specific risk be diversified away by investing in both Bank Pan and Pioneerindo Gourmet 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 Pioneerindo Gourmet 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 Pioneerindo Gourmet International, you can compare the effects of market volatilities on Bank Pan and Pioneerindo Gourmet 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 Pioneerindo Gourmet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Pan and Pioneerindo Gourmet.
Diversification Opportunities for Bank Pan and Pioneerindo Gourmet
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Pioneerindo is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Bank Pan Indonesia and Pioneerindo Gourmet Internatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneerindo Gourmet 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 Pioneerindo Gourmet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneerindo Gourmet has no effect on the direction of Bank Pan i.e., Bank Pan and Pioneerindo Gourmet go up and down completely randomly.
Pair Corralation between Bank Pan and Pioneerindo Gourmet
Assuming the 90 days trading horizon Bank Pan Indonesia is expected to generate 0.46 times more return on investment than Pioneerindo Gourmet. However, Bank Pan Indonesia is 2.19 times less risky than Pioneerindo Gourmet. It trades about 0.12 of its potential returns per unit of risk. Pioneerindo Gourmet International is currently generating about -0.01 per unit of risk. If you would invest 110,000 in Bank Pan Indonesia on August 25, 2024 and sell it today you would earn a total of 69,000 from holding Bank Pan Indonesia or generate 62.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Pan Indonesia vs. Pioneerindo Gourmet Internatio
Performance |
| Timeline |
| Bank Pan Indonesia |
| Pioneerindo Gourmet |
Bank Pan and Pioneerindo Gourmet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Pan and Pioneerindo Gourmet
The main advantage of trading using opposite Bank Pan and Pioneerindo Gourmet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Pan position performs unexpectedly, Pioneerindo Gourmet 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 Pioneerindo Gourmet will offset losses from the drop in Pioneerindo Gourmet'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 |
| Pioneerindo Gourmet vs. PT Dewi Shri | Pioneerindo Gourmet vs. Bangun Karya Perkasa | Pioneerindo Gourmet vs. Gaya Abadi Sempurna | Pioneerindo Gourmet vs. Habco Trans Maritima |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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