Correlation Between Rimo International and Eastparc Hotel

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Can any of the company-specific risk be diversified away by investing in both Rimo International 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 Rimo International and Eastparc Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rimo International Lestari and Eastparc Hotel Tbk, you can compare the effects of market volatilities on Rimo International 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 Rimo International with a short position of Eastparc Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rimo International and Eastparc Hotel.

Diversification Opportunities for Rimo International and Eastparc Hotel

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Rimo and Eastparc is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Rimo International Lestari 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 Rimo International 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 Rimo International Lestari 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 Rimo International i.e., Rimo International and Eastparc Hotel go up and down completely randomly.

Pair Corralation between Rimo International and Eastparc Hotel

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

Rimo International Lestari  vs.  Eastparc Hotel Tbk

 Performance 
       Timeline  
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 Tbk 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 and Eastparc Hotel Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Rimo International and Eastparc Hotel

The main advantage of trading using opposite Rimo International and Eastparc Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rimo International 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.
The idea behind Rimo International Lestari and Eastparc Hotel Tbk 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.
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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