Correlation Between Communication Cable and Hotel Sahid
Can any of the company-specific risk be diversified away by investing in both Communication Cable and Hotel Sahid 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 Communication Cable and Hotel Sahid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Communication Cable Systems and Hotel Sahid Jaya, you can compare the effects of market volatilities on Communication Cable and Hotel Sahid 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 Communication Cable with a short position of Hotel Sahid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Communication Cable and Hotel Sahid.
Diversification Opportunities for Communication Cable and Hotel Sahid
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Communication and Hotel is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Communication Cable Systems and Hotel Sahid Jaya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotel Sahid Jaya and Communication Cable 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 Communication Cable Systems are associated (or correlated) with Hotel Sahid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotel Sahid Jaya has no effect on the direction of Communication Cable i.e., Communication Cable and Hotel Sahid go up and down completely randomly.
Pair Corralation between Communication Cable and Hotel Sahid
Assuming the 90 days trading horizon Communication Cable Systems is expected to generate 0.62 times more return on investment than Hotel Sahid. However, Communication Cable Systems is 1.61 times less risky than Hotel Sahid. It trades about -0.04 of its potential returns per unit of risk. Hotel Sahid Jaya is currently generating about -0.03 per unit of risk. If you would invest 67,000 in Communication Cable Systems on November 2, 2024 and sell it today you would lose (39,000) from holding Communication Cable Systems or give up 58.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Communication Cable Systems vs. Hotel Sahid Jaya
Performance |
| Timeline |
| Communication Cable |
| Hotel Sahid Jaya |
Communication Cable and Hotel Sahid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Communication Cable and Hotel Sahid
The main advantage of trading using opposite Communication Cable and Hotel Sahid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Communication Cable position performs unexpectedly, Hotel Sahid 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 Sahid will offset losses from the drop in Hotel Sahid's long position.| Communication Cable vs. Berkah Prima Perkasa | Communication Cable vs. Hartadinata Abadi Tbk | Communication Cable vs. Estika Tata Tiara | Communication Cable vs. Garudafood Putra Putri |
| Hotel Sahid vs. Pembangunan Jaya Ancol | Hotel Sahid vs. Panorama Sentrawisata Tbk | Hotel Sahid vs. Sona Topas Tourism | Hotel Sahid vs. Millennium Pharmacon International |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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