Correlation Between Mitra Pinasthika and Hotel Fitra

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

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

Diversification Opportunities for Mitra Pinasthika and Hotel Fitra

-0.41

Correlation Coefficient

Mitra Pinasthika  Hotel Fitra

Very good diversification

The 3 months correlation between Mitra and Hotel is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Mitra Pinasthika Mustika and Hotel Fitra International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotel Fitra International and Mitra Pinasthika 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 Mitra Pinasthika Mustika are associated (or correlated) with Hotel Fitra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotel Fitra International has no effect on the direction of Mitra Pinasthika i.e., Mitra Pinasthika and Hotel Fitra go up and down completely randomly.

Pair Corralation between Mitra Pinasthika and Hotel Fitra

Assuming the 90 days trading horizon Mitra Pinasthika is expected to generate 66.73 times less return on investment than Hotel Fitra. But when comparing it to its historical volatility, Mitra Pinasthika Mustika is 5.31 times less risky than Hotel Fitra. It trades about 0.01 of its potential returns per unit of risk. Hotel Fitra International is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  9,700  in Hotel Fitra International on December 30, 2024 and sell it today you would earn a total of  5,500  from holding Hotel Fitra International or generate 56.7% return on investment over 90 days.

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

Mitra Pinasthika Mustika  vs.  Hotel Fitra International

Mitra Pinasthika Mustika

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mitra Pinasthika Mustika are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Mitra Pinasthika is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

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.

Pair Trading with Mitra Pinasthika and Hotel Fitra

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

The idea behind Mitra Pinasthika Mustika and Hotel Fitra International 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.