Correlation Between Telekom Malaysia and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Telekom Malaysia and Dow Jones 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 Telekom Malaysia and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telekom Malaysia Bhd and Dow Jones Industrial, you can compare the effects of market volatilities on Telekom Malaysia and Dow Jones 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 Telekom Malaysia with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telekom Malaysia and Dow Jones.
Diversification Opportunities for Telekom Malaysia and Dow Jones
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Telekom and Dow is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Telekom Malaysia Bhd and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Telekom Malaysia 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 Telekom Malaysia Bhd are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Telekom Malaysia i.e., Telekom Malaysia and Dow Jones go up and down completely randomly.
Pair Corralation between Telekom Malaysia and Dow Jones
Assuming the 90 days trading horizon Telekom Malaysia Bhd is expected to generate 1.61 times more return on investment than Dow Jones. However, Telekom Malaysia is 1.61 times more volatile than Dow Jones Industrial. It trades about 0.18 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.01 per unit of risk. If you would invest 640.00 in Telekom Malaysia Bhd on September 14, 2024 and sell it today you would earn a total of 22.00 from holding Telekom Malaysia Bhd or generate 3.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Telekom Malaysia Bhd vs. Dow Jones Industrial
Performance |
| Timeline |
Telekom Malaysia and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Telekom Malaysia Bhd
Pair trading matchups for Telekom Malaysia
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Telekom Malaysia and Dow Jones
The main advantage of trading using opposite Telekom Malaysia and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telekom Malaysia position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Telekom Malaysia vs. Cosmos Technology International | Telekom Malaysia vs. Nova Wellness Group | Telekom Malaysia vs. Cloudpoint Technology Berhad | Telekom Malaysia vs. DC HEALTHCARE HOLDINGS |
| Dow Jones vs. Hurco Companies | Dow Jones vs. Tyson Foods | Dow Jones vs. MYR Group | Dow Jones vs. Cannae Holdings |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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