Correlation Between Campina Ice and Hotel Fitra
Can any of the company-specific risk be diversified away by investing in both Campina Ice and Hotel Fitra 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 Campina Ice and Hotel Fitra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Campina Ice Cream and Hotel Fitra International, you can compare the effects of market volatilities on Campina Ice and Hotel Fitra 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 Campina Ice with a short position of Hotel Fitra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Campina Ice and Hotel Fitra.
Diversification Opportunities for Campina Ice and Hotel Fitra
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Campina and Hotel is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Campina Ice Cream and Hotel Fitra International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotel Fitra International and Campina Ice 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 Campina Ice Cream are associated (or correlated) with Hotel Fitra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotel Fitra International has no effect on the direction of Campina Ice i.e., Campina Ice and Hotel Fitra go up and down completely randomly.
Pair Corralation between Campina Ice and Hotel Fitra
Assuming the 90 days trading horizon Campina Ice Cream is expected to under-perform the Hotel Fitra. In addition to that, Campina Ice is 2.25 times more volatile than Hotel Fitra International. It trades about -0.23 of its total potential returns per unit of risk. Hotel Fitra International is currently generating about -0.14 per unit of volatility. If you would invest 10,100 in Hotel Fitra International on August 28, 2024 and sell it today you would lose (300.00) from holding Hotel Fitra International or give up 2.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Campina Ice Cream vs. Hotel Fitra International
Performance |
| Timeline |
| Campina Ice Cream |
| Hotel Fitra International |
Campina Ice and Hotel Fitra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Campina Ice and Hotel Fitra
The main advantage of trading using opposite Campina Ice and Hotel Fitra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Campina Ice position performs unexpectedly, Hotel Fitra 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 Hotel Fitra will offset losses from the drop in Hotel Fitra's long position.The idea behind Campina Ice Cream and Hotel Fitra International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Hotel Fitra vs. Jasa Armada Indonesia | Hotel Fitra vs. Cahayaputra Asa Keramik | Hotel Fitra vs. Campina Ice Cream |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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