Correlation Between Beijing MediaLimited and Telkom Indonesia
Can any of the company-specific risk be diversified away by investing in both Beijing MediaLimited 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 Beijing MediaLimited and Telkom Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beijing Media and Telkom Indonesia Tbk, you can compare the effects of market volatilities on Beijing MediaLimited 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 Beijing MediaLimited with a short position of Telkom Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing MediaLimited and Telkom Indonesia.
Diversification Opportunities for Beijing MediaLimited and Telkom Indonesia
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Beijing and Telkom is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Media 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 Beijing MediaLimited 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 Beijing Media 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 Beijing MediaLimited i.e., Beijing MediaLimited and Telkom Indonesia go up and down completely randomly.
Pair Corralation between Beijing MediaLimited and Telkom Indonesia
Assuming the 90 days horizon Beijing Media is expected to generate 0.47 times more return on investment than Telkom Indonesia. However, Beijing Media is 2.14 times less risky than Telkom Indonesia. It trades about 0.08 of its potential returns per unit of risk. Telkom Indonesia Tbk is currently generating about -0.09 per unit of risk. If you would invest 3.60 in Beijing Media on August 24, 2024 and sell it today you would earn a total of 0.15 from holding Beijing Media or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Beijing Media vs. Telkom Indonesia Tbk
Performance |
| Timeline |
| Beijing MediaLimited |
| Telkom Indonesia Tbk |
Beijing MediaLimited and Telkom Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing MediaLimited and Telkom Indonesia
The main advantage of trading using opposite Beijing MediaLimited and Telkom Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing MediaLimited 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.| Beijing MediaLimited vs. The Interpublic Group | Beijing MediaLimited vs. Superior Plus Corp | Beijing MediaLimited vs. NMI Holdings | Beijing MediaLimited vs. Origin Agritech |
| Telkom Indonesia vs. Beijing Media | Telkom Indonesia vs. ZINC MEDIA GR | Telkom Indonesia vs. Salesforce | Telkom Indonesia vs. GigaMedia |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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