Correlation Between Hotel Fitra and Citra Putra

Can any of the company-specific risk be diversified away by investing in both Hotel Fitra and Citra Putra 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 Fitra and Citra Putra into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hotel Fitra International and Citra Putra Realty, you can compare the effects of market volatilities on Hotel Fitra and Citra Putra 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 Fitra with a short position of Citra Putra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotel Fitra and Citra Putra.

Diversification Opportunities for Hotel Fitra and Citra Putra

0.26

Correlation Coefficient

Hotel Fitra  Citra Putra

Modest diversification

The 3 months correlation between Hotel and Citra is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Hotel Fitra International and Citra Putra Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citra Putra Realty and Hotel Fitra 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 Fitra International are associated (or correlated) with Citra Putra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citra Putra Realty has no effect on the direction of Hotel Fitra i.e., Hotel Fitra and Citra Putra go up and down completely randomly.

Pair Corralation between Hotel Fitra and Citra Putra

Assuming the 90 days trading horizon Hotel Fitra is expected to generate 2.04 times less return on investment than Citra Putra. In addition to that, Hotel Fitra is 1.26 times more volatile than Citra Putra Realty. It trades about 0.17 of its total potential returns per unit of risk. Citra Putra Realty is currently generating about 0.43 per unit of volatility. If you would invest  26,600  in Citra Putra Realty on December 30, 2024 and sell it today you would earn a total of  45,400  from holding Citra Putra Realty or generate 170.68% return on investment over 90 days.

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

Hotel Fitra International  vs.  Citra Putra Realty

Hotel Fitra International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hotel Fitra International are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Hotel Fitra disclosed solid returns over the last few months and may actually be approaching a breakup point.

Citra Putra Realty

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Citra Putra Realty are ranked lower than 34 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Citra Putra disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hotel Fitra and Citra Putra

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

The idea behind Hotel Fitra International and Citra Putra Realty 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.