Correlation Between Eastparc Hotel and Rimo International

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Can any of the company-specific risk be diversified away by investing in both Eastparc Hotel and Rimo International 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 Rimo International 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 Rimo International Lestari, you can compare the effects of market volatilities on Eastparc Hotel and Rimo International 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 Rimo International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastparc Hotel and Rimo International.

Diversification Opportunities for Eastparc Hotel and Rimo International

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Eastparc and Rimo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Eastparc Hotel Tbk and Rimo International Lestari in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rimo International 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 Rimo International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rimo International has no effect on the direction of Eastparc Hotel i.e., Eastparc Hotel and Rimo International go up and down completely randomly.

Pair Corralation between Eastparc Hotel and Rimo International

If you would invest  8,879  in Eastparc Hotel Tbk on September 12, 2024 and sell it today you would earn a total of  2,521  from holding Eastparc Hotel Tbk or generate 28.39% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Eastparc Hotel Tbk  vs.  Rimo International Lestari

 Performance 
       Timeline  
Eastparc Hotel Tbk 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Eastparc Hotel Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Eastparc Hotel is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
Rimo International 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Rimo International Lestari has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Rimo International is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Eastparc Hotel and Rimo International Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Eastparc Hotel and Rimo International

The main advantage of trading using opposite Eastparc Hotel and Rimo International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastparc Hotel position performs unexpectedly, Rimo International 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 Rimo International will offset losses from the drop in Rimo International's long position.
The idea behind Eastparc Hotel Tbk and Rimo International Lestari pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

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