Correlation Between HEXINDO ADIPERKASA and Marriott Vacations

Can any of the company-specific risk be diversified away by investing in both HEXINDO ADIPERKASA and Marriott Vacations 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 HEXINDO ADIPERKASA and Marriott Vacations into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HEXINDO ADIPERKASA and Marriott Vacations Worldwide, you can compare the effects of market volatilities on HEXINDO ADIPERKASA and Marriott Vacations 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 HEXINDO ADIPERKASA with a short position of Marriott Vacations. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEXINDO ADIPERKASA and Marriott Vacations.

Diversification Opportunities for HEXINDO ADIPERKASA and Marriott Vacations

-0.85

Correlation Coefficient

HEXINDO ADIPERKASA  Marriott Vacations

Pay attention - limited upside

The 3 months correlation between HEXINDO and Marriott is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding HEXINDO ADIPERKASA and Marriott Vacations Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marriott Vacations and HEXINDO ADIPERKASA 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 HEXINDO ADIPERKASA are associated (or correlated) with Marriott Vacations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marriott Vacations has no effect on the direction of HEXINDO ADIPERKASA i.e., HEXINDO ADIPERKASA and Marriott Vacations go up and down completely randomly.

Pair Corralation between HEXINDO ADIPERKASA and Marriott Vacations

Assuming the 90 days trading horizon HEXINDO ADIPERKASA is expected to under-perform the Marriott Vacations. But the stock apears to be less risky and, when comparing its historical volatility, HEXINDO ADIPERKASA is 2.53 times less risky than Marriott Vacations. The stock trades about -0.36 of its potential returns per unit of risk. The Marriott Vacations Worldwide is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  6,987  in Marriott Vacations Worldwide on October 23, 2024 and sell it today you would earn a total of  1,213  from holding Marriott Vacations Worldwide or generate 17.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

HEXINDO ADIPERKASA  vs.  Marriott Vacations Worldwide

HEXINDO ADIPERKASA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HEXINDO ADIPERKASA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Marriott Vacations

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Marriott Vacations Worldwide are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Marriott Vacations reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HEXINDO ADIPERKASA and Marriott Vacations

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

The idea behind HEXINDO ADIPERKASA and Marriott Vacations Worldwide 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .