Correlation Between Hotel Fitra and Jasnita Telekomindo

Can any of the company-specific risk be diversified away by investing in both Hotel Fitra and Jasnita Telekomindo 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 Jasnita Telekomindo 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 Jasnita Telekomindo Tbk, you can compare the effects of market volatilities on Hotel Fitra and Jasnita Telekomindo 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 Jasnita Telekomindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotel Fitra and Jasnita Telekomindo.

Diversification Opportunities for Hotel Fitra and Jasnita Telekomindo

0.22

Correlation Coefficient

Hotel Fitra  Jasnita Telekomindo

Modest diversification

The 3 months correlation between Hotel and Jasnita is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Hotel Fitra International and Jasnita Telekomindo Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jasnita Telekomindo Tbk 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 Jasnita Telekomindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jasnita Telekomindo Tbk has no effect on the direction of Hotel Fitra i.e., Hotel Fitra and Jasnita Telekomindo go up and down completely randomly.

Pair Corralation between Hotel Fitra and Jasnita Telekomindo

Assuming the 90 days trading horizon Hotel Fitra International is expected to under-perform the Jasnita Telekomindo. But the stock apears to be less risky and, when comparing its historical volatility, Hotel Fitra International is 1.21 times less risky than Jasnita Telekomindo. The stock trades about -0.19 of its potential returns per unit of risk. The Jasnita Telekomindo Tbk is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  5,000  in Jasnita Telekomindo Tbk on December 2, 2024 and sell it today you would earn a total of  800.00  from holding Jasnita Telekomindo Tbk or generate 16.0% 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.  Jasnita Telekomindo Tbk

Hotel Fitra International

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hotel Fitra International are ranked lower than 16 (%) 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.

Jasnita Telekomindo Tbk

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jasnita Telekomindo Tbk are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Jasnita Telekomindo disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hotel Fitra and Jasnita Telekomindo

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

The idea behind Hotel Fitra International and Jasnita Telekomindo 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.

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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.