Correlation Between VARIOUS EATERIES and HEXINDO ADIPERKASA
Can any of the company-specific risk be diversified away by investing in both VARIOUS EATERIES and HEXINDO ADIPERKASA 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 VARIOUS EATERIES and HEXINDO ADIPERKASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VARIOUS EATERIES LS and HEXINDO ADIPERKASA, you can compare the effects of market volatilities on VARIOUS EATERIES and HEXINDO ADIPERKASA 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 VARIOUS EATERIES with a short position of HEXINDO ADIPERKASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of VARIOUS EATERIES and HEXINDO ADIPERKASA.
Diversification Opportunities for VARIOUS EATERIES and HEXINDO ADIPERKASA
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VARIOUS and HEXINDO is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding VARIOUS EATERIES LS and HEXINDO ADIPERKASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEXINDO ADIPERKASA and VARIOUS EATERIES 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 VARIOUS EATERIES LS are associated (or correlated) with HEXINDO ADIPERKASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEXINDO ADIPERKASA has no effect on the direction of VARIOUS EATERIES i.e., VARIOUS EATERIES and HEXINDO ADIPERKASA go up and down completely randomly.
Pair Corralation between VARIOUS EATERIES and HEXINDO ADIPERKASA
Assuming the 90 days horizon VARIOUS EATERIES LS is expected to under-perform the HEXINDO ADIPERKASA. In addition to that, VARIOUS EATERIES is 1.58 times more volatile than HEXINDO ADIPERKASA. It trades about -0.24 of its total potential returns per unit of risk. HEXINDO ADIPERKASA is currently generating about -0.24 per unit of volatility. If you would invest 30.00 in HEXINDO ADIPERKASA on October 24, 2024 and sell it today you would lose (1.00) from holding HEXINDO ADIPERKASA or give up 3.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VARIOUS EATERIES LS vs. HEXINDO ADIPERKASA
Performance |
| Timeline |
| VARIOUS EATERIES |
| HEXINDO ADIPERKASA |
VARIOUS EATERIES and HEXINDO ADIPERKASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VARIOUS EATERIES and HEXINDO ADIPERKASA
The main advantage of trading using opposite VARIOUS EATERIES and HEXINDO ADIPERKASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VARIOUS EATERIES position performs unexpectedly, HEXINDO ADIPERKASA 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 HEXINDO ADIPERKASA will offset losses from the drop in HEXINDO ADIPERKASA's long position.| VARIOUS EATERIES vs. BORR DRILLING NEW | VARIOUS EATERIES vs. PKSHA TECHNOLOGY INC | VARIOUS EATERIES vs. ASPEN TECHINC DL | VARIOUS EATERIES vs. Kingdee International Software |
| HEXINDO ADIPERKASA vs. VARIOUS EATERIES LS | HEXINDO ADIPERKASA vs. Madison Square Garden | HEXINDO ADIPERKASA vs. USWE SPORTS AB | HEXINDO ADIPERKASA vs. ETFS Coffee ETC |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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