Correlation Between Equity Development and Eastparc Hotel
Can any of the company-specific risk be diversified away by investing in both Equity Development 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 Equity Development and Eastparc Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equity Development Investment and Eastparc Hotel Tbk, you can compare the effects of market volatilities on Equity Development 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 Equity Development with a short position of Eastparc Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equity Development and Eastparc Hotel.
Diversification Opportunities for Equity Development and Eastparc Hotel
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Equity and Eastparc is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Equity Development Investment 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 Equity Development 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 Equity Development Investment 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 Equity Development i.e., Equity Development and Eastparc Hotel go up and down completely randomly.
Pair Corralation between Equity Development and Eastparc Hotel
Assuming the 90 days trading horizon Equity Development Investment is expected to generate 1.24 times more return on investment than Eastparc Hotel. However, Equity Development is 1.24 times more volatile than Eastparc Hotel Tbk. It trades about 0.0 of its potential returns per unit of risk. Eastparc Hotel Tbk is currently generating about -0.02 per unit of risk. If you would invest 6,100 in Equity Development Investment on August 27, 2024 and sell it today you would lose (600.00) from holding Equity Development Investment or give up 9.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equity Development Investment vs. Eastparc Hotel Tbk
Performance |
| Timeline |
| Equity Development |
| Eastparc Hotel Tbk |
Equity Development and Eastparc Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equity Development and Eastparc Hotel
The main advantage of trading using opposite Equity Development and Eastparc Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equity Development 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.| Equity Development vs. Pacific Strategic Financial | Equity Development vs. Asuransi Harta Aman | Equity Development vs. Buana Finance Tbk | Equity Development vs. Asuransi Bintang Tbk |
| 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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