Correlation Between Impiana Hotels and Tambun Indah

Can any of the company-specific risk be diversified away by investing in both Impiana Hotels and Tambun Indah 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 Impiana Hotels and Tambun Indah into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Impiana Hotels Bhd and Tambun Indah Land, you can compare the effects of market volatilities on Impiana Hotels and Tambun Indah 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 Impiana Hotels with a short position of Tambun Indah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impiana Hotels and Tambun Indah.

Diversification Opportunities for Impiana Hotels and Tambun Indah

0.16

Correlation Coefficient

Impiana Hotels  Tambun Indah

Average diversification

The 3 months correlation between Impiana and Tambun is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Impiana Hotels Bhd and Tambun Indah Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tambun Indah Land and Impiana Hotels 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 Impiana Hotels Bhd are associated (or correlated) with Tambun Indah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tambun Indah Land has no effect on the direction of Impiana Hotels i.e., Impiana Hotels and Tambun Indah go up and down completely randomly.

Pair Corralation between Impiana Hotels and Tambun Indah

Assuming the 90 days trading horizon Impiana Hotels Bhd is expected to generate 2.65 times more return on investment than Tambun Indah. However, Impiana Hotels is 2.65 times more volatile than Tambun Indah Land. It trades about 0.04 of its potential returns per unit of risk. Tambun Indah Land is currently generating about -0.01 per unit of risk. If you would invest  22.00  in Impiana Hotels Bhd on October 10, 2024 and sell it today you would earn a total of  1.00  from holding Impiana Hotels Bhd or generate 4.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Impiana Hotels Bhd  vs.  Tambun Indah Land

Impiana Hotels Bhd

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Impiana Hotels Bhd are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Impiana Hotels may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Tambun Indah Land

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tambun Indah Land has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Tambun Indah is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Impiana Hotels and Tambun Indah

The main advantage of trading using opposite Impiana Hotels and Tambun Indah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impiana Hotels position performs unexpectedly, Tambun Indah 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 Tambun Indah will offset losses from the drop in Tambun Indah's long position.

The idea behind Impiana Hotels Bhd and Tambun Indah Land 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.

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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 Transaction History module to view history of all your transactions and understand their impact on performance.