Correlation Between Panin Financial and Garuda Metalindo
Can any of the company-specific risk be diversified away by investing in both Panin Financial and Garuda Metalindo 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 Financial and Garuda Metalindo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Panin Financial Tbk and Garuda Metalindo Tbk, you can compare the effects of market volatilities on Panin Financial and Garuda Metalindo 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 Financial with a short position of Garuda Metalindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panin Financial and Garuda Metalindo.
Diversification Opportunities for Panin Financial and Garuda Metalindo
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Panin and Garuda is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Panin Financial Tbk and Garuda Metalindo Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garuda Metalindo Tbk and Panin Financial 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 Financial Tbk are associated (or correlated) with Garuda Metalindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garuda Metalindo Tbk has no effect on the direction of Panin Financial i.e., Panin Financial and Garuda Metalindo go up and down completely randomly.
Pair Corralation between Panin Financial and Garuda Metalindo
Assuming the 90 days trading horizon Panin Financial Tbk is expected to generate 1.52 times more return on investment than Garuda Metalindo. However, Panin Financial is 1.52 times more volatile than Garuda Metalindo Tbk. It trades about 0.08 of its potential returns per unit of risk. Garuda Metalindo Tbk is currently generating about 0.08 per unit of risk. If you would invest 26,800 in Panin Financial Tbk on September 1, 2024 and sell it today you would earn a total of 16,200 from holding Panin Financial Tbk or generate 60.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Panin Financial Tbk vs. Garuda Metalindo Tbk
Performance |
| Timeline |
| Panin Financial Tbk |
| Garuda Metalindo Tbk |
Panin Financial and Garuda Metalindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Panin Financial and Garuda Metalindo
The main advantage of trading using opposite Panin Financial and Garuda Metalindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Panin Financial position performs unexpectedly, Garuda Metalindo 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 Garuda Metalindo will offset losses from the drop in Garuda Metalindo's long position.| Panin Financial vs. Bank Pan Indonesia | Panin Financial vs. Paninvest Tbk | Panin Financial vs. Kawasan Industri Jababeka | Panin Financial vs. Global Mediacom Tbk |
| Garuda Metalindo vs. Matahari Department Store | Garuda Metalindo vs. Multi Medika Internasional | Garuda Metalindo vs. Visi Media Asia | Garuda Metalindo vs. Bayan Resources 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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