Correlation Between Panin Financial and Wahana Ottomitra
Can any of the company-specific risk be diversified away by investing in both Panin Financial and Wahana Ottomitra 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 Wahana Ottomitra 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 Wahana Ottomitra Multiartha, you can compare the effects of market volatilities on Panin Financial and Wahana Ottomitra 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 Wahana Ottomitra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panin Financial and Wahana Ottomitra.
Diversification Opportunities for Panin Financial and Wahana Ottomitra
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Panin and Wahana is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Panin Financial Tbk and Wahana Ottomitra Multiartha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wahana Ottomitra Mul 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 Wahana Ottomitra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wahana Ottomitra Mul has no effect on the direction of Panin Financial i.e., Panin Financial and Wahana Ottomitra go up and down completely randomly.
Pair Corralation between Panin Financial and Wahana Ottomitra
Assuming the 90 days trading horizon Panin Financial Tbk is expected to generate 2.29 times more return on investment than Wahana Ottomitra. However, Panin Financial is 2.29 times more volatile than Wahana Ottomitra Multiartha. It trades about 0.04 of its potential returns per unit of risk. Wahana Ottomitra Multiartha is currently generating about 0.02 per unit of risk. If you would invest 26,600 in Panin Financial Tbk on December 11, 2024 and sell it today you would earn a total of 7,400 from holding Panin Financial Tbk or generate 27.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Panin Financial Tbk vs. Wahana Ottomitra Multiartha
Performance |
| Timeline |
| Panin Financial Tbk |
| Wahana Ottomitra Mul |
Panin Financial and Wahana Ottomitra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Panin Financial and Wahana Ottomitra
The main advantage of trading using opposite Panin Financial and Wahana Ottomitra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Panin Financial position performs unexpectedly, Wahana Ottomitra 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 Wahana Ottomitra will offset losses from the drop in Wahana Ottomitra's long position.| Panin Financial vs. Bank Pan Indonesia | ||
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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