Correlation Between Eastparc Hotel and Surya Permata
Can any of the company-specific risk be diversified away by investing in both Eastparc Hotel and Surya Permata 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 Surya Permata 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 Surya Permata Andalan, you can compare the effects of market volatilities on Eastparc Hotel and Surya Permata 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 Surya Permata. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastparc Hotel and Surya Permata.
Diversification Opportunities for Eastparc Hotel and Surya Permata
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eastparc and Surya is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Eastparc Hotel Tbk and Surya Permata Andalan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surya Permata Andalan 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 Surya Permata. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surya Permata Andalan has no effect on the direction of Eastparc Hotel i.e., Eastparc Hotel and Surya Permata go up and down completely randomly.
Pair Corralation between Eastparc Hotel and Surya Permata
Assuming the 90 days trading horizon Eastparc Hotel is expected to generate 3.08 times less return on investment than Surya Permata. But when comparing it to its historical volatility, Eastparc Hotel Tbk is 2.88 times less risky than Surya Permata. It trades about 0.12 of its potential returns per unit of risk. Surya Permata Andalan is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 14,800 in Surya Permata Andalan on November 2, 2024 and sell it today you would earn a total of 800.00 from holding Surya Permata Andalan or generate 5.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastparc Hotel Tbk vs. Surya Permata Andalan
Performance |
| Timeline |
| Eastparc Hotel Tbk |
| Surya Permata Andalan |
Eastparc Hotel and Surya Permata Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastparc Hotel and Surya Permata
The main advantage of trading using opposite Eastparc Hotel and Surya Permata positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastparc Hotel position performs unexpectedly, Surya Permata 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 Surya Permata will offset losses from the drop in Surya Permata'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 |
| Surya Permata vs. Bintang Oto Global | Surya Permata vs. Metro Healthcare Indonesia | Surya Permata vs. Bhakti Multi Artha | Surya Permata vs. MNC Vision Networks |
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 CEOs Directory module to screen CEOs from public companies around the world.
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