Correlation Between Bank Pan and Pabrik Kertas
Can any of the company-specific risk be diversified away by investing in both Bank Pan and Pabrik Kertas 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 Pabrik Kertas 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 Pabrik Kertas Tjiwi, you can compare the effects of market volatilities on Bank Pan and Pabrik Kertas 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 Pabrik Kertas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Pan and Pabrik Kertas.
Diversification Opportunities for Bank Pan and Pabrik Kertas
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Pabrik is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Bank Pan Indonesia and Pabrik Kertas Tjiwi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pabrik Kertas Tjiwi 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 Pabrik Kertas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pabrik Kertas Tjiwi has no effect on the direction of Bank Pan i.e., Bank Pan and Pabrik Kertas go up and down completely randomly.
Pair Corralation between Bank Pan and Pabrik Kertas
Assuming the 90 days trading horizon Bank Pan Indonesia is expected to generate 0.86 times more return on investment than Pabrik Kertas. However, Bank Pan Indonesia is 1.17 times less risky than Pabrik Kertas. It trades about -0.15 of its potential returns per unit of risk. Pabrik Kertas Tjiwi is currently generating about -0.29 per unit of risk. If you would invest 192,500 in Bank Pan Indonesia on August 27, 2024 and sell it today you would lose (13,500) from holding Bank Pan Indonesia or give up 7.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Pan Indonesia vs. Pabrik Kertas Tjiwi
Performance |
| Timeline |
| Bank Pan Indonesia |
| Pabrik Kertas Tjiwi |
Bank Pan and Pabrik Kertas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Pan and Pabrik Kertas
The main advantage of trading using opposite Bank Pan and Pabrik Kertas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Pan position performs unexpectedly, Pabrik Kertas 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 Pabrik Kertas will offset losses from the drop in Pabrik Kertas' 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 |
| Pabrik Kertas vs. Indah Kiat Pulp | Pabrik Kertas vs. Indocement Tunggal Prakarsa | Pabrik Kertas vs. Barito Pacific Tbk | Pabrik Kertas vs. Charoen Pokphand Indonesia |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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