Correlation Between Neinor Homes and Telkom Indonesia
Can any of the company-specific risk be diversified away by investing in both Neinor Homes and Telkom Indonesia 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 Neinor Homes and Telkom Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neinor Homes SA and Telkom Indonesia Tbk, you can compare the effects of market volatilities on Neinor Homes and Telkom Indonesia 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 Neinor Homes with a short position of Telkom Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neinor Homes and Telkom Indonesia.
Diversification Opportunities for Neinor Homes and Telkom Indonesia
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Neinor and Telkom is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Neinor Homes SA and Telkom Indonesia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telkom Indonesia Tbk and Neinor Homes 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 Neinor Homes SA are associated (or correlated) with Telkom Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telkom Indonesia Tbk has no effect on the direction of Neinor Homes i.e., Neinor Homes and Telkom Indonesia go up and down completely randomly.
Pair Corralation between Neinor Homes and Telkom Indonesia
Assuming the 90 days trading horizon Neinor Homes SA is expected to generate 0.26 times more return on investment than Telkom Indonesia. However, Neinor Homes SA is 3.85 times less risky than Telkom Indonesia. It trades about 0.14 of its potential returns per unit of risk. Telkom Indonesia Tbk is currently generating about -0.05 per unit of risk. If you would invest 1,589 in Neinor Homes SA on November 7, 2024 and sell it today you would earn a total of 85.00 from holding Neinor Homes SA or generate 5.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Neinor Homes SA vs. Telkom Indonesia Tbk
Performance |
| Timeline |
| Neinor Homes SA |
| Telkom Indonesia Tbk |
Neinor Homes and Telkom Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neinor Homes and Telkom Indonesia
The main advantage of trading using opposite Neinor Homes and Telkom Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neinor Homes position performs unexpectedly, Telkom Indonesia 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 Telkom Indonesia will offset losses from the drop in Telkom Indonesia's long position.| Neinor Homes vs. AEGEAN AIRLINES | Neinor Homes vs. SOUTHWEST AIRLINES | Neinor Homes vs. Fukuyama Transporting Co | Neinor Homes vs. Television Broadcasts Limited |
| Telkom Indonesia vs. Reinsurance Group of | Telkom Indonesia vs. National Beverage Corp | Telkom Indonesia vs. SAN MIGUEL BREWERY | Telkom Indonesia vs. Tsingtao Brewery |
Check out your portfolio center.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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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