Correlation Between Empire State and PT Harapan
Can any of the company-specific risk be diversified away by investing in both Empire State and PT Harapan 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 Empire State and PT Harapan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire State Realty and PT Harapan Duta, you can compare the effects of market volatilities on Empire State and PT Harapan 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 Empire State with a short position of PT Harapan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and PT Harapan.
Diversification Opportunities for Empire State and PT Harapan
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Empire and HOPE is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and PT Harapan Duta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Harapan Duta and Empire State 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 Empire State Realty are associated (or correlated) with PT Harapan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Harapan Duta has no effect on the direction of Empire State i.e., Empire State and PT Harapan go up and down completely randomly.
Pair Corralation between Empire State and PT Harapan
Given the investment horizon of 90 days Empire State Realty is expected to generate 0.25 times more return on investment than PT Harapan. However, Empire State Realty is 3.96 times less risky than PT Harapan. It trades about 0.09 of its potential returns per unit of risk. PT Harapan Duta is currently generating about -0.09 per unit of risk. If you would invest 1,082 in Empire State Realty on August 29, 2024 and sell it today you would earn a total of 26.00 from holding Empire State Realty or generate 2.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Empire State Realty vs. PT Harapan Duta
Performance |
| Timeline |
| Empire State Realty |
| PT Harapan Duta |
Empire State and PT Harapan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and PT Harapan
The main advantage of trading using opposite Empire State and PT Harapan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State position performs unexpectedly, PT Harapan 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 PT Harapan will offset losses from the drop in PT Harapan's long position.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| PT Harapan vs. Lion Metal Works | PT Harapan vs. Pelangi Indah Canindo | PT Harapan vs. Indal Aluminium Industry | PT Harapan vs. Tembaga Mulia Semanan |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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