Correlation Between Paninvest Tbk and Trust Finance
Can any of the company-specific risk be diversified away by investing in both Paninvest Tbk and Trust Finance 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 Paninvest Tbk and Trust Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Paninvest Tbk and Trust Finance Indonesia, you can compare the effects of market volatilities on Paninvest Tbk and Trust Finance 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 Paninvest Tbk with a short position of Trust Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paninvest Tbk and Trust Finance.
Diversification Opportunities for Paninvest Tbk and Trust Finance
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Paninvest and Trust is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Paninvest Tbk and Trust Finance Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trust Finance Indonesia and Paninvest Tbk 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 Paninvest Tbk are associated (or correlated) with Trust Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trust Finance Indonesia has no effect on the direction of Paninvest Tbk i.e., Paninvest Tbk and Trust Finance go up and down completely randomly.
Pair Corralation between Paninvest Tbk and Trust Finance
Assuming the 90 days trading horizon Paninvest Tbk is expected to generate 1.42 times less return on investment than Trust Finance. But when comparing it to its historical volatility, Paninvest Tbk is 1.52 times less risky than Trust Finance. It trades about 0.03 of its potential returns per unit of risk. Trust Finance Indonesia is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 40,800 in Trust Finance Indonesia on August 27, 2024 and sell it today you would earn a total of 4,000 from holding Trust Finance Indonesia or generate 9.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Paninvest Tbk vs. Trust Finance Indonesia
Performance |
| Timeline |
| Paninvest Tbk |
| Trust Finance Indonesia |
Paninvest Tbk and Trust Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Paninvest Tbk and Trust Finance
The main advantage of trading using opposite Paninvest Tbk and Trust Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paninvest Tbk position performs unexpectedly, Trust Finance 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 Trust Finance will offset losses from the drop in Trust Finance's long position.| Paninvest Tbk vs. Panin Sekuritas Tbk | Paninvest Tbk vs. Wahana Ottomitra Multiartha | Paninvest Tbk vs. Lenox Pasifik Investama |
| Trust Finance vs. Paninvest Tbk | Trust Finance vs. Panin Sekuritas Tbk | Trust Finance vs. Wahana Ottomitra Multiartha | Trust Finance vs. Lenox Pasifik Investama |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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