Correlation Between Repower Asia and Paninvest Tbk
Can any of the company-specific risk be diversified away by investing in both Repower Asia and Paninvest Tbk 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 Repower Asia and Paninvest Tbk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Repower Asia Indonesia and Paninvest Tbk, you can compare the effects of market volatilities on Repower Asia and Paninvest Tbk 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 Repower Asia with a short position of Paninvest Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Repower Asia and Paninvest Tbk.
Diversification Opportunities for Repower Asia and Paninvest Tbk
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Repower and Paninvest is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Repower Asia Indonesia and Paninvest Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paninvest Tbk and Repower Asia 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 Repower Asia Indonesia are associated (or correlated) with Paninvest Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paninvest Tbk has no effect on the direction of Repower Asia i.e., Repower Asia and Paninvest Tbk go up and down completely randomly.
Pair Corralation between Repower Asia and Paninvest Tbk
Assuming the 90 days trading horizon Repower Asia Indonesia is expected to under-perform the Paninvest Tbk. In addition to that, Repower Asia is 2.96 times more volatile than Paninvest Tbk. It trades about -0.02 of its total potential returns per unit of risk. Paninvest Tbk is currently generating about -0.01 per unit of volatility. If you would invest 139,000 in Paninvest Tbk on August 28, 2024 and sell it today you would lose (32,500) from holding Paninvest Tbk or give up 23.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Repower Asia Indonesia vs. Paninvest Tbk
Performance |
| Timeline |
| Repower Asia Indonesia |
| Paninvest Tbk |
Repower Asia and Paninvest Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Repower Asia and Paninvest Tbk
The main advantage of trading using opposite Repower Asia and Paninvest Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Repower Asia position performs unexpectedly, Paninvest Tbk 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 Paninvest Tbk will offset losses from the drop in Paninvest Tbk's long position.| Repower Asia vs. Bumi Benowo Sukses | Repower Asia vs. Andalan Sakti Primaindo | Repower Asia vs. Bhakti Multi Artha | Repower Asia vs. Greenwood Sejahtera Tbk |
| Paninvest Tbk vs. Panin Financial Tbk | Paninvest Tbk vs. Bank Pan Indonesia | Paninvest Tbk vs. Panin Sekuritas Tbk | Paninvest Tbk vs. Clipan Finance 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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