Correlation Between Eastparc Hotel and Lautan Luas
Can any of the company-specific risk be diversified away by investing in both Eastparc Hotel and Lautan Luas 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 Lautan Luas 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 Lautan Luas Tbk, you can compare the effects of market volatilities on Eastparc Hotel and Lautan Luas 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 Lautan Luas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastparc Hotel and Lautan Luas.
Diversification Opportunities for Eastparc Hotel and Lautan Luas
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eastparc and Lautan is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Eastparc Hotel Tbk and Lautan Luas Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lautan Luas Tbk 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 Lautan Luas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lautan Luas Tbk has no effect on the direction of Eastparc Hotel i.e., Eastparc Hotel and Lautan Luas go up and down completely randomly.
Pair Corralation between Eastparc Hotel and Lautan Luas
Assuming the 90 days trading horizon Eastparc Hotel Tbk is expected to generate 1.24 times more return on investment than Lautan Luas. However, Eastparc Hotel is 1.24 times more volatile than Lautan Luas Tbk. It trades about 0.04 of its potential returns per unit of risk. Lautan Luas Tbk is currently generating about -0.02 per unit of risk. If you would invest 8,969 in Eastparc Hotel Tbk on September 13, 2024 and sell it today you would earn a total of 2,531 from holding Eastparc Hotel Tbk or generate 28.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Eastparc Hotel Tbk vs. Lautan Luas Tbk
Performance |
| Timeline |
| Eastparc Hotel Tbk |
| Lautan Luas Tbk |
Eastparc Hotel and Lautan Luas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastparc Hotel and Lautan Luas
The main advantage of trading using opposite Eastparc Hotel and Lautan Luas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastparc Hotel position performs unexpectedly, Lautan Luas 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 Lautan Luas will offset losses from the drop in Lautan Luas' long position.| Eastparc Hotel vs. Menteng Heritage Realty | Eastparc Hotel vs. Sanurhasta Mitra PT | Eastparc Hotel vs. Sentra Food Indonesia | Eastparc Hotel vs. Yelooo Integra Datanet |
| Lautan Luas vs. Humpuss Intermoda Transportasi | Lautan Luas vs. Trinitan Metals and | Lautan Luas vs. Pacific Strategic Financial | Lautan Luas vs. PT Bank Bisnis |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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