Correlation Between Arkadia Digital and Hotel Sahid
Can any of the company-specific risk be diversified away by investing in both Arkadia Digital 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 Arkadia Digital and Hotel Sahid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arkadia Digital Media and Hotel Sahid Jaya, you can compare the effects of market volatilities on Arkadia Digital 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 Arkadia Digital with a short position of Hotel Sahid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arkadia Digital and Hotel Sahid.
Diversification Opportunities for Arkadia Digital and Hotel Sahid
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Arkadia and Hotel is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Arkadia Digital Media 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 Arkadia Digital 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 Arkadia Digital Media 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 Arkadia Digital i.e., Arkadia Digital and Hotel Sahid go up and down completely randomly.
Pair Corralation between Arkadia Digital and Hotel Sahid
Assuming the 90 days trading horizon Arkadia Digital Media is expected to under-perform the Hotel Sahid. But the stock apears to be less risky and, when comparing its historical volatility, Arkadia Digital Media is 1.33 times less risky than Hotel Sahid. The stock trades about -0.04 of its potential returns per unit of risk. The Hotel Sahid Jaya is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 243,000 in Hotel Sahid Jaya on November 2, 2024 and sell it today you would lose (174,000) from holding Hotel Sahid Jaya or give up 71.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arkadia Digital Media vs. Hotel Sahid Jaya
Performance |
| Timeline |
| Arkadia Digital Media |
| Hotel Sahid Jaya |
Arkadia Digital and Hotel Sahid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arkadia Digital and Hotel Sahid
The main advantage of trading using opposite Arkadia Digital and Hotel Sahid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arkadia Digital 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.| Arkadia Digital vs. Electronic City Indonesia | Arkadia Digital vs. MD Pictures Tbk | Arkadia Digital vs. Bintang Oto Global | Arkadia Digital vs. Graha Layar Prima |
| 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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