Correlation Between Panin Financial and Leyand International
Can any of the company-specific risk be diversified away by investing in both Panin Financial and Leyand International 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 Leyand International 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 Leyand International Tbk, you can compare the effects of market volatilities on Panin Financial and Leyand International 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 Leyand International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panin Financial and Leyand International.
Diversification Opportunities for Panin Financial and Leyand International
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Panin and Leyand is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Panin Financial Tbk and Leyand International Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leyand International 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 Leyand International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leyand International Tbk has no effect on the direction of Panin Financial i.e., Panin Financial and Leyand International go up and down completely randomly.
Pair Corralation between Panin Financial and Leyand International
Assuming the 90 days trading horizon Panin Financial Tbk is expected to under-perform the Leyand International. But the stock apears to be less risky and, when comparing its historical volatility, Panin Financial Tbk is 2.93 times less risky than Leyand International. The stock trades about -0.07 of its potential returns per unit of risk. The Leyand International Tbk is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,900 in Leyand International Tbk on November 3, 2024 and sell it today you would earn a total of 300.00 from holding Leyand International Tbk or generate 15.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Panin Financial Tbk vs. Leyand International Tbk
Performance |
| Timeline |
| Panin Financial Tbk |
| Leyand International Tbk |
Panin Financial and Leyand International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Panin Financial and Leyand International
The main advantage of trading using opposite Panin Financial and Leyand International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Panin Financial position performs unexpectedly, Leyand International 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 Leyand International will offset losses from the drop in Leyand International'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 |
| Leyand International vs. Tera Data Indonusa | Leyand International vs. Indorama Synthetics Tbk | Leyand International vs. Trinitan Metals and | Leyand International vs. Metrodata Electronics 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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