Correlation Between Eastparc Hotel and Hoffmen Cleanindo
Can any of the company-specific risk be diversified away by investing in both Eastparc Hotel and Hoffmen Cleanindo 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 Hoffmen Cleanindo 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 Hoffmen Cleanindo, you can compare the effects of market volatilities on Eastparc Hotel and Hoffmen Cleanindo 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 Hoffmen Cleanindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastparc Hotel and Hoffmen Cleanindo.
Diversification Opportunities for Eastparc Hotel and Hoffmen Cleanindo
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Eastparc and Hoffmen is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Eastparc Hotel Tbk and Hoffmen Cleanindo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoffmen Cleanindo 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 Hoffmen Cleanindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoffmen Cleanindo has no effect on the direction of Eastparc Hotel i.e., Eastparc Hotel and Hoffmen Cleanindo go up and down completely randomly.
Pair Corralation between Eastparc Hotel and Hoffmen Cleanindo
Assuming the 90 days trading horizon Eastparc Hotel Tbk is expected to under-perform the Hoffmen Cleanindo. In addition to that, Eastparc Hotel is 1.32 times more volatile than Hoffmen Cleanindo. It trades about -0.11 of its total potential returns per unit of risk. Hoffmen Cleanindo is currently generating about -0.05 per unit of volatility. If you would invest 16,900 in Hoffmen Cleanindo on August 24, 2024 and sell it today you would lose (500.00) from holding Hoffmen Cleanindo or give up 2.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastparc Hotel Tbk vs. Hoffmen Cleanindo
Performance |
| Timeline |
| Eastparc Hotel Tbk |
| Hoffmen Cleanindo |
Eastparc Hotel and Hoffmen Cleanindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastparc Hotel and Hoffmen Cleanindo
The main advantage of trading using opposite Eastparc Hotel and Hoffmen Cleanindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastparc Hotel position performs unexpectedly, Hoffmen Cleanindo 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 Hoffmen Cleanindo will offset losses from the drop in Hoffmen Cleanindo's long position.| Eastparc Hotel vs. Menteng Heritage Realty | Eastparc Hotel vs. Jasa Armada Indonesia | Eastparc Hotel vs. Cahayaputra Asa Keramik | Eastparc Hotel vs. Campina Ice Cream |
| Hoffmen Cleanindo vs. Bank Central Asia | Hoffmen Cleanindo vs. Bank Rakyat Indonesia | Hoffmen Cleanindo vs. Bank Mandiri Persero | Hoffmen Cleanindo vs. Astra International 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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