Correlation Between Indointernet Tbk and Eastparc Hotel
Can any of the company-specific risk be diversified away by investing in both Indointernet Tbk and Eastparc Hotel 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 Indointernet Tbk and Eastparc Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indointernet Tbk PT and Eastparc Hotel Tbk, you can compare the effects of market volatilities on Indointernet Tbk and Eastparc Hotel 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 Indointernet Tbk with a short position of Eastparc Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indointernet Tbk and Eastparc Hotel.
Diversification Opportunities for Indointernet Tbk and Eastparc Hotel
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Indointernet and Eastparc is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Indointernet Tbk PT and Eastparc Hotel Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastparc Hotel Tbk and Indointernet Tbk 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 Indointernet Tbk PT are associated (or correlated) with Eastparc Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastparc Hotel Tbk has no effect on the direction of Indointernet Tbk i.e., Indointernet Tbk and Eastparc Hotel go up and down completely randomly.
Pair Corralation between Indointernet Tbk and Eastparc Hotel
Assuming the 90 days trading horizon Indointernet Tbk PT is expected to generate 0.59 times more return on investment than Eastparc Hotel. However, Indointernet Tbk PT is 1.7 times less risky than Eastparc Hotel. It trades about -0.12 of its potential returns per unit of risk. Eastparc Hotel Tbk is currently generating about -0.11 per unit of risk. If you would invest 414,000 in Indointernet Tbk PT on August 30, 2024 and sell it today you would lose (19,000) from holding Indointernet Tbk PT or give up 4.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indointernet Tbk PT vs. Eastparc Hotel Tbk
Performance |
| Timeline |
| Indointernet Tbk |
| Eastparc Hotel Tbk |
Indointernet Tbk and Eastparc Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indointernet Tbk and Eastparc Hotel
The main advantage of trading using opposite Indointernet Tbk and Eastparc Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indointernet Tbk position performs unexpectedly, Eastparc Hotel 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 Eastparc Hotel will offset losses from the drop in Eastparc Hotel's long position.| Indointernet Tbk vs. DCI Indonesia Tbk | Indointernet Tbk vs. Digital Mediatama Maxima | Indointernet Tbk vs. Multipolar Technology Tbk | Indointernet Tbk vs. Bank Net Indonesia |
| Eastparc Hotel vs. Menteng Heritage Realty | Eastparc Hotel vs. Hotel Fitra International | Eastparc Hotel vs. Jasa Armada Indonesia | Eastparc Hotel vs. Cahayaputra Asa Keramik |
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 Stocks Directory module to find actively traded stocks across global markets.
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