Correlation Between Pioneerindo Gourmet and Hotel Sahid

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

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

Diversification Opportunities for Pioneerindo Gourmet and Hotel Sahid

0.63

Correlation Coefficient

Pioneerindo Gourmet  Hotel Sahid

Poor diversification

The 3 months correlation between Pioneerindo and Hotel is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Pioneerindo Gourmet Internatio 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 Pioneerindo Gourmet 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 Pioneerindo Gourmet International 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 Pioneerindo Gourmet i.e., Pioneerindo Gourmet and Hotel Sahid go up and down completely randomly.

Pair Corralation between Pioneerindo Gourmet and Hotel Sahid

Assuming the 90 days trading horizon Pioneerindo Gourmet International is expected to under-perform the Hotel Sahid. In addition to that, Pioneerindo Gourmet is 1.08 times more volatile than Hotel Sahid Jaya. It trades about -0.16 of its total potential returns per unit of risk. Hotel Sahid Jaya is currently generating about -0.01 per unit of volatility. If you would invest  100,000  in Hotel Sahid Jaya on September 5, 2024 and sell it today you would lose (5,000) from holding Hotel Sahid Jaya or give up 5.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Pioneerindo Gourmet Internatio  vs.  Hotel Sahid Jaya

Pioneerindo Gourmet

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pioneerindo Gourmet International 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 January 2025. The latest mess may also be a sign of long-standing up-swing for the company 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 quite persistent forward-looking signals, Hotel Sahid is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Pioneerindo Gourmet and Hotel Sahid

The main advantage of trading using opposite Pioneerindo Gourmet and Hotel Sahid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pioneerindo Gourmet 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 Pioneerindo Gourmet International 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.