Correlation Between Marie Brizard and Telkom Indonesia
Can any of the company-specific risk be diversified away by investing in both Marie Brizard 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 Marie Brizard and Telkom Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marie Brizard Wine and Telkom Indonesia Tbk, you can compare the effects of market volatilities on Marie Brizard 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 Marie Brizard with a short position of Telkom Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marie Brizard and Telkom Indonesia.
Diversification Opportunities for Marie Brizard and Telkom Indonesia
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Marie and Telkom is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Marie Brizard Wine 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 Marie Brizard 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 Marie Brizard Wine 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 Marie Brizard i.e., Marie Brizard and Telkom Indonesia go up and down completely randomly.
Pair Corralation between Marie Brizard and Telkom Indonesia
Assuming the 90 days trading horizon Marie Brizard Wine is expected to under-perform the Telkom Indonesia. But the stock apears to be less risky and, when comparing its historical volatility, Marie Brizard Wine is 7.55 times less risky than Telkom Indonesia. The stock trades about -0.54 of its potential returns per unit of risk. The Telkom Indonesia Tbk is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Telkom Indonesia Tbk on November 6, 2024 and sell it today you would lose (2.00) from holding Telkom Indonesia Tbk or give up 11.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marie Brizard Wine vs. Telkom Indonesia Tbk
Performance |
| Timeline |
| Marie Brizard Wine |
| Telkom Indonesia Tbk |
Marie Brizard and Telkom Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marie Brizard and Telkom Indonesia
The main advantage of trading using opposite Marie Brizard and Telkom Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marie Brizard 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.| Marie Brizard vs. Apple Inc | Marie Brizard vs. Apple Inc | Marie Brizard vs. Apple Inc | Marie Brizard vs. Apple Inc |
| Telkom Indonesia vs. ADRIATIC METALS LS 013355 | Telkom Indonesia vs. GRIFFIN MINING LTD | Telkom Indonesia vs. ALBIS LEASING AG | Telkom Indonesia vs. East Africa Metals |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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