Correlation Between Petrosea Tbk and Bank Pan
Can any of the company-specific risk be diversified away by investing in both Petrosea Tbk 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 Petrosea Tbk and Bank Pan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Petrosea Tbk and Bank Pan Indonesia, you can compare the effects of market volatilities on Petrosea Tbk 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 Petrosea Tbk with a short position of Bank Pan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrosea Tbk and Bank Pan.
Diversification Opportunities for Petrosea Tbk and Bank Pan
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Petrosea and Bank is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Petrosea 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 Petrosea Tbk 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 Petrosea 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 Petrosea Tbk i.e., Petrosea Tbk and Bank Pan go up and down completely randomly.
Pair Corralation between Petrosea Tbk and Bank Pan
Assuming the 90 days trading horizon Petrosea Tbk is expected to generate 1.66 times more return on investment than Bank Pan. However, Petrosea Tbk is 1.66 times more volatile than Bank Pan Indonesia. It trades about 0.1 of its potential returns per unit of risk. Bank Pan Indonesia is currently generating about 0.01 per unit of risk. If you would invest 388,994 in Petrosea Tbk on August 27, 2024 and sell it today you would earn a total of 1,498,506 from holding Petrosea Tbk or generate 385.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petrosea Tbk vs. Bank Pan Indonesia
Performance |
| Timeline |
| Petrosea Tbk |
| Bank Pan Indonesia |
Petrosea Tbk and Bank Pan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrosea Tbk and Bank Pan
The main advantage of trading using opposite Petrosea Tbk and Bank Pan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrosea Tbk 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.| Petrosea Tbk vs. Indika Energy Tbk | Petrosea Tbk vs. Harum Energy Tbk | Petrosea Tbk vs. Indo Tambangraya Megah | Petrosea Tbk vs. Gajah Tunggal Tbk |
| Bank Pan vs. Paninvest Tbk | Bank Pan vs. Wahana Ottomitra Multiartha | Bank Pan vs. Lenox Pasifik Investama |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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