Correlation Between Forza Land and Hotel Sahid

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

By analyzing existing cross correlation between Forza Land Indonesia and Hotel Sahid Jaya, you can compare the effects of market volatilities on Forza Land and Hotel Sahid 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 Forza Land with a short position of Hotel Sahid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forza Land and Hotel Sahid.

Diversification Opportunities for Forza Land and Hotel Sahid

0.0

Correlation Coefficient

Forza Land  Hotel Sahid

Pay attention - limited upside

The 3 months correlation between Forza and Hotel is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Forza Land Indonesia and Hotel Sahid Jaya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotel Sahid Jaya and Forza Land 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 Forza Land Indonesia are associated (or correlated) with Hotel Sahid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotel Sahid Jaya has no effect on the direction of Forza Land i.e., Forza Land and Hotel Sahid go up and down completely randomly.

Pair Corralation between Forza Land and Hotel Sahid

If you would invest  5,000  in Forza Land Indonesia on October 12, 2024 and sell it today you would earn a total of  0.00  from holding Forza Land Indonesia or generate 0.0% return on investment over 90 days.

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

Forza Land Indonesia  vs.  Hotel Sahid Jaya

Forza Land Indonesia

Risk-Adjusted Performance

0 of 100

Very Weak

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

Hotel Sahid Jaya

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hotel Sahid Jaya has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Forza Land and Hotel Sahid

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

The idea behind Forza Land Indonesia and Hotel Sahid Jaya 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 Commodity Directory module to find actively traded commodities issued by global exchanges.