Correlation Between PT Hatten and Eastparc Hotel
Can any of the company-specific risk be diversified away by investing in both PT Hatten 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 PT Hatten and Eastparc Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Hatten Bali and Eastparc Hotel Tbk, you can compare the effects of market volatilities on PT Hatten 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 PT Hatten with a short position of Eastparc Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Hatten and Eastparc Hotel.
Diversification Opportunities for PT Hatten and Eastparc Hotel
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WINE and Eastparc is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding PT Hatten Bali 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 PT Hatten 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 PT Hatten Bali 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 PT Hatten i.e., PT Hatten and Eastparc Hotel go up and down completely randomly.
Pair Corralation between PT Hatten and Eastparc Hotel
Assuming the 90 days trading horizon PT Hatten Bali is expected to generate 1.77 times more return on investment than Eastparc Hotel. However, PT Hatten is 1.77 times more volatile than Eastparc Hotel Tbk. It trades about 0.05 of its potential returns per unit of risk. Eastparc Hotel Tbk is currently generating about -0.11 per unit of risk. If you would invest 33,600 in PT Hatten Bali on August 26, 2024 and sell it today you would earn a total of 1,800 from holding PT Hatten Bali or generate 5.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Hatten Bali vs. Eastparc Hotel Tbk
Performance |
| Timeline |
| PT Hatten Bali |
| Eastparc Hotel Tbk |
PT Hatten and Eastparc Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Hatten and Eastparc Hotel
The main advantage of trading using opposite PT Hatten and Eastparc Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Hatten 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.| PT Hatten vs. Bank Central Asia | PT Hatten vs. Bank Rakyat Indonesia | PT Hatten vs. Bayan Resources Tbk | PT Hatten vs. Bank Mandiri Persero |
| Eastparc Hotel vs. Hotel Fitra International | Eastparc Hotel vs. Jasa Armada Indonesia | Eastparc Hotel vs. Cahayaputra Asa Keramik | Eastparc Hotel vs. Campina Ice Cream |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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