Correlation Between Airtel Africa and PT Indosat
Can any of the company-specific risk be diversified away by investing in both Airtel Africa and PT Indosat 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 Airtel Africa and PT Indosat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Airtel Africa Plc and PT Indosat Tbk, you can compare the effects of market volatilities on Airtel Africa and PT Indosat 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 Airtel Africa with a short position of PT Indosat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airtel Africa and PT Indosat.
Diversification Opportunities for Airtel Africa and PT Indosat
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Airtel and PTITF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Airtel Africa Plc and PT Indosat Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Indosat Tbk and Airtel Africa 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 Airtel Africa Plc are associated (or correlated) with PT Indosat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Indosat Tbk has no effect on the direction of Airtel Africa i.e., Airtel Africa and PT Indosat go up and down completely randomly.
Pair Corralation between Airtel Africa and PT Indosat
If you would invest 63.00 in PT Indosat Tbk on August 26, 2024 and sell it today you would earn a total of 0.00 from holding PT Indosat Tbk or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airtel Africa Plc vs. PT Indosat Tbk
Performance |
| Timeline |
| Airtel Africa Plc |
| PT Indosat Tbk |
Airtel Africa and PT Indosat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airtel Africa and PT Indosat
The main advantage of trading using opposite Airtel Africa and PT Indosat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airtel Africa position performs unexpectedly, PT Indosat 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 PT Indosat will offset losses from the drop in PT Indosat's long position.| Airtel Africa vs. BCE Inc | Airtel Africa vs. Axiologix | Airtel Africa vs. Advanced Info Service | Airtel Africa vs. American Nortel Communications |
| PT Indosat vs. Singapore Telecommunications Limited | PT Indosat vs. China Tower | PT Indosat vs. Vodafone Group PLC | PT Indosat vs. MTN Group Ltd |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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