Correlation Between Eastparc Hotel and Garudafood Putra
Can any of the company-specific risk be diversified away by investing in both Eastparc Hotel and Garudafood Putra 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 Eastparc Hotel and Garudafood Putra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastparc Hotel Tbk and Garudafood Putra Putri, you can compare the effects of market volatilities on Eastparc Hotel and Garudafood Putra 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 Eastparc Hotel with a short position of Garudafood Putra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastparc Hotel and Garudafood Putra.
Diversification Opportunities for Eastparc Hotel and Garudafood Putra
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eastparc and Garudafood is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Eastparc Hotel Tbk and Garudafood Putra Putri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garudafood Putra Putri and Eastparc Hotel 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 Eastparc Hotel Tbk are associated (or correlated) with Garudafood Putra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garudafood Putra Putri has no effect on the direction of Eastparc Hotel i.e., Eastparc Hotel and Garudafood Putra go up and down completely randomly.
Pair Corralation between Eastparc Hotel and Garudafood Putra
Assuming the 90 days trading horizon Eastparc Hotel Tbk is expected to under-perform the Garudafood Putra. But the stock apears to be less risky and, when comparing its historical volatility, Eastparc Hotel Tbk is 1.02 times less risky than Garudafood Putra. The stock trades about -0.11 of its potential returns per unit of risk. The Garudafood Putra Putri is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 42,000 in Garudafood Putra Putri on August 30, 2024 and sell it today you would lose (2,400) from holding Garudafood Putra Putri or give up 5.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastparc Hotel Tbk vs. Garudafood Putra Putri
Performance |
| Timeline |
| Eastparc Hotel Tbk |
| Garudafood Putra Putri |
Eastparc Hotel and Garudafood Putra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastparc Hotel and Garudafood Putra
The main advantage of trading using opposite Eastparc Hotel and Garudafood Putra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastparc Hotel position performs unexpectedly, Garudafood Putra 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 Garudafood Putra will offset losses from the drop in Garudafood Putra's long position.| Eastparc Hotel vs. Menteng Heritage Realty | Eastparc Hotel vs. Hotel Fitra International | Eastparc Hotel vs. Jasa Armada Indonesia | Eastparc Hotel vs. Cahayaputra Asa Keramik |
| Garudafood Putra vs. Sariguna Primatirta PT | Garudafood Putra vs. Ultra Jaya Milk | Garudafood Putra vs. Nippon Indosari Corpindo | Garudafood Putra vs. Kino Indonesia Tbk |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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