Correlation Between Erajaya Swasembada and Hotel Sahid
Can any of the company-specific risk be diversified away by investing in both Erajaya Swasembada and Hotel Sahid 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 Erajaya Swasembada and Hotel Sahid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Erajaya Swasembada Tbk and Hotel Sahid Jaya, you can compare the effects of market volatilities on Erajaya Swasembada and Hotel Sahid 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 Erajaya Swasembada with a short position of Hotel Sahid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erajaya Swasembada and Hotel Sahid.
Diversification Opportunities for Erajaya Swasembada and Hotel Sahid
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Erajaya and Hotel is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Erajaya Swasembada Tbk and Hotel Sahid Jaya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotel Sahid Jaya and Erajaya Swasembada 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 Erajaya Swasembada Tbk are associated (or correlated) with Hotel Sahid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotel Sahid Jaya has no effect on the direction of Erajaya Swasembada i.e., Erajaya Swasembada and Hotel Sahid go up and down completely randomly.
Pair Corralation between Erajaya Swasembada and Hotel Sahid
Assuming the 90 days trading horizon Erajaya Swasembada Tbk is expected to generate 0.43 times more return on investment than Hotel Sahid. However, Erajaya Swasembada Tbk is 2.33 times less risky than Hotel Sahid. It trades about 0.01 of its potential returns per unit of risk. Hotel Sahid Jaya is currently generating about -0.02 per unit of risk. If you would invest 44,513 in Erajaya Swasembada Tbk on August 31, 2024 and sell it today you would lose (2,313) from holding Erajaya Swasembada Tbk or give up 5.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Erajaya Swasembada Tbk vs. Hotel Sahid Jaya
Performance |
| Timeline |
| Erajaya Swasembada Tbk |
| Hotel Sahid Jaya |
Erajaya Swasembada and Hotel Sahid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erajaya Swasembada and Hotel Sahid
The main advantage of trading using opposite Erajaya Swasembada and Hotel Sahid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erajaya Swasembada position performs unexpectedly, Hotel Sahid 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 Hotel Sahid will offset losses from the drop in Hotel Sahid's long position.| Erajaya Swasembada vs. Multipolar Tbk | Erajaya Swasembada vs. Astra Graphia Tbk | Erajaya Swasembada vs. Matahari Putra Prima | Erajaya Swasembada vs. Ramayana Lestari Sentosa |
| Hotel Sahid vs. Japfa Comfeed Indonesia | Hotel Sahid vs. Charoen Pokphand Indonesia | Hotel Sahid vs. Erajaya Swasembada Tbk | Hotel Sahid vs. Indofood Cbp Sukses |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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