Correlation Between Eastparc Hotel and Mitrabara Adiperdana
Can any of the company-specific risk be diversified away by investing in both Eastparc Hotel and Mitrabara Adiperdana 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 Mitrabara Adiperdana 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 Mitrabara Adiperdana PT, you can compare the effects of market volatilities on Eastparc Hotel and Mitrabara Adiperdana 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 Mitrabara Adiperdana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastparc Hotel and Mitrabara Adiperdana.
Diversification Opportunities for Eastparc Hotel and Mitrabara Adiperdana
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eastparc and Mitrabara is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Eastparc Hotel Tbk and Mitrabara Adiperdana PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitrabara Adiperdana 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 Mitrabara Adiperdana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitrabara Adiperdana has no effect on the direction of Eastparc Hotel i.e., Eastparc Hotel and Mitrabara Adiperdana go up and down completely randomly.
Pair Corralation between Eastparc Hotel and Mitrabara Adiperdana
Assuming the 90 days trading horizon Eastparc Hotel Tbk is expected to generate 0.85 times more return on investment than Mitrabara Adiperdana. However, Eastparc Hotel Tbk is 1.17 times less risky than Mitrabara Adiperdana. It trades about -0.06 of its potential returns per unit of risk. Mitrabara Adiperdana PT is currently generating about -0.06 per unit of risk. If you would invest 13,438 in Eastparc Hotel Tbk on September 2, 2024 and sell it today you would lose (3,038) from holding Eastparc Hotel Tbk or give up 22.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastparc Hotel Tbk vs. Mitrabara Adiperdana PT
Performance |
| Timeline |
| Eastparc Hotel Tbk |
| Mitrabara Adiperdana |
Eastparc Hotel and Mitrabara Adiperdana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastparc Hotel and Mitrabara Adiperdana
The main advantage of trading using opposite Eastparc Hotel and Mitrabara Adiperdana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastparc Hotel position performs unexpectedly, Mitrabara Adiperdana 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 Mitrabara Adiperdana will offset losses from the drop in Mitrabara Adiperdana's long position.| Eastparc Hotel vs. Jasa Armada Indonesia | Eastparc Hotel vs. Cahayaputra Asa Keramik | Eastparc Hotel vs. Campina Ice Cream | Eastparc Hotel vs. Integra Indocabinet Tbk |
| Mitrabara Adiperdana vs. Baramulti Suksessarana Tbk | Mitrabara Adiperdana vs. Samindo Resources Tbk | Mitrabara Adiperdana vs. Hexindo Adiperkasa Tbk | Mitrabara Adiperdana vs. Mitra Pinasthika Mustika |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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