Correlation Between Panin Financial and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Panin Financial and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Panin Financial and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panin Financial and Dow Jones.
Diversification Opportunities for Panin Financial and Dow Jones
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Panin and Dow is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Panin Financial Tbk and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Panin Financial i.e., Panin Financial and Dow Jones go up and down completely randomly.
Pair Corralation between Panin Financial and Dow Jones
Assuming the 90 days trading horizon Panin Financial Tbk is expected to under-perform the Dow Jones. In addition to that, Panin Financial is 2.77 times more volatile than Dow Jones Industrial. It trades about -0.13 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.21 per unit of volatility. If you would invest 4,237,436 in Dow Jones Industrial on August 25, 2024 and sell it today you would earn a total of 192,215 from holding Dow Jones Industrial or generate 4.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Panin Financial Tbk vs. Dow Jones Industrial
Performance |
| Timeline |
Panin Financial and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Panin Financial Tbk
Pair trading matchups for Panin Financial
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Panin Financial and Dow Jones
The main advantage of trading using opposite Panin Financial and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Panin Financial position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Panin Financial vs. Paninvest Tbk | Panin Financial vs. Maskapai Reasuransi Indonesia | Panin Financial vs. Panin Sekuritas Tbk | Panin Financial vs. Wahana Ottomitra Multiartha |
| Dow Jones vs. Vistra Energy Corp | Dow Jones vs. Fluence Energy | Dow Jones vs. Old Republic International | Dow Jones vs. Empresa Distribuidora y |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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