Correlation Between Hotel Sahid and Wahana Pronatural
Can any of the company-specific risk be diversified away by investing in both Hotel Sahid and Wahana Pronatural 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 Hotel Sahid and Wahana Pronatural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hotel Sahid Jaya and Wahana Pronatural, you can compare the effects of market volatilities on Hotel Sahid and Wahana Pronatural 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 Hotel Sahid with a short position of Wahana Pronatural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotel Sahid and Wahana Pronatural.
Diversification Opportunities for Hotel Sahid and Wahana Pronatural
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hotel and Wahana is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Hotel Sahid Jaya and Wahana Pronatural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wahana Pronatural and Hotel Sahid 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 Hotel Sahid Jaya are associated (or correlated) with Wahana Pronatural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wahana Pronatural has no effect on the direction of Hotel Sahid i.e., Hotel Sahid and Wahana Pronatural go up and down completely randomly.
Pair Corralation between Hotel Sahid and Wahana Pronatural
Assuming the 90 days trading horizon Hotel Sahid Jaya is expected to under-perform the Wahana Pronatural. In addition to that, Hotel Sahid is 1.29 times more volatile than Wahana Pronatural. It trades about -0.03 of its total potential returns per unit of risk. Wahana Pronatural is currently generating about -0.02 per unit of volatility. If you would invest 11,100 in Wahana Pronatural on September 1, 2024 and sell it today you would lose (1,900) from holding Wahana Pronatural or give up 17.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hotel Sahid Jaya vs. Wahana Pronatural
Performance |
| Timeline |
| Hotel Sahid Jaya |
| Wahana Pronatural |
Hotel Sahid and Wahana Pronatural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hotel Sahid and Wahana Pronatural
The main advantage of trading using opposite Hotel Sahid and Wahana Pronatural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotel Sahid position performs unexpectedly, Wahana Pronatural 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 Wahana Pronatural will offset losses from the drop in Wahana Pronatural's long position.| Hotel Sahid vs. Japfa Comfeed Indonesia | Hotel Sahid vs. Charoen Pokphand Indonesia | Hotel Sahid vs. Erajaya Swasembada Tbk | Hotel Sahid vs. Indofood Cbp Sukses |
| Wahana Pronatural vs. Wicaksana Overseas International | Wahana Pronatural vs. Millennium Pharmacon International | Wahana Pronatural vs. Tigaraksa Satria Tbk | Wahana Pronatural vs. Tempo Inti Media |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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