Correlation Between Astra International and Telkom Indonesia
Can any of the company-specific risk be diversified away by investing in both Astra International 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 Astra International and Telkom Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astra International Tbk and Telkom Indonesia Tbk, you can compare the effects of market volatilities on Astra International 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 Astra International with a short position of Telkom Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra International and Telkom Indonesia.
Diversification Opportunities for Astra International and Telkom Indonesia
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Astra and Telkom is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Astra International Tbk 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 Astra International 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 Astra International Tbk 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 Astra International i.e., Astra International and Telkom Indonesia go up and down completely randomly.
Pair Corralation between Astra International and Telkom Indonesia
Assuming the 90 days trading horizon Astra International Tbk is expected to under-perform the Telkom Indonesia. But the stock apears to be less risky and, when comparing its historical volatility, Astra International Tbk is 2.19 times less risky than Telkom Indonesia. The stock trades about -0.19 of its potential returns per unit of risk. The Telkom Indonesia Tbk is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 266,000 in Telkom Indonesia Tbk on November 18, 2024 and sell it today you would lose (13,000) from holding Telkom Indonesia Tbk or give up 4.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astra International Tbk vs. Telkom Indonesia Tbk
Performance |
| Timeline |
| Astra International Tbk |
| Telkom Indonesia Tbk |
Astra International and Telkom Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astra International and Telkom Indonesia
The main advantage of trading using opposite Astra International and Telkom Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra International 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.| Astra International vs. Telkom Indonesia Tbk | Astra International vs. Bank Mandiri Persero | Astra International vs. Bank Central Asia | Astra International vs. PT Indofood Sukses |
| Telkom Indonesia vs. Astra International Tbk | Telkom Indonesia vs. Bank Rakyat Indonesia | Telkom Indonesia vs. Bank Mandiri Persero | Telkom Indonesia vs. Bank Central Asia |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |