Correlation Between Panin Financial and Bank Pan
Can any of the company-specific risk be diversified away by investing in both Panin Financial and Bank Pan 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 Bank Pan 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 Bank Pan Indonesia, you can compare the effects of market volatilities on Panin Financial and Bank Pan 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 Bank Pan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panin Financial and Bank Pan.
Diversification Opportunities for Panin Financial and Bank Pan
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Panin and Bank is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Panin Financial Tbk and Bank Pan Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Pan Indonesia 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 Bank Pan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Pan Indonesia has no effect on the direction of Panin Financial i.e., Panin Financial and Bank Pan go up and down completely randomly.
Pair Corralation between Panin Financial and Bank Pan
Assuming the 90 days trading horizon Panin Financial Tbk is expected to under-perform the Bank Pan. In addition to that, Panin Financial is 1.2 times more volatile than Bank Pan Indonesia. It trades about -0.13 of its total potential returns per unit of risk. Bank Pan Indonesia is currently generating about -0.11 per unit of volatility. If you would invest 190,000 in Bank Pan Indonesia on August 25, 2024 and sell it today you would lose (11,000) from holding Bank Pan Indonesia or give up 5.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Panin Financial Tbk vs. Bank Pan Indonesia
Performance |
| Timeline |
| Panin Financial Tbk |
| Bank Pan Indonesia |
Panin Financial and Bank Pan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Panin Financial and Bank Pan
The main advantage of trading using opposite Panin Financial and Bank Pan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Panin Financial position performs unexpectedly, Bank Pan 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 Bank Pan will offset losses from the drop in Bank Pan's 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 |
| Bank Pan vs. Bank Danamon Indonesia | Bank Pan vs. Bank Cimb Niaga | Bank Pan vs. Panin Financial Tbk | Bank Pan vs. Bank Maybank 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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