Correlation Between BANK RAKYAT and Telkom Indonesia
Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT 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 BANK RAKYAT and Telkom Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK RAKYAT IND and Telkom Indonesia Tbk, you can compare the effects of market volatilities on BANK RAKYAT 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 BANK RAKYAT with a short position of Telkom Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and Telkom Indonesia.
Diversification Opportunities for BANK RAKYAT and Telkom Indonesia
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BANK and Telkom is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND 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 BANK RAKYAT 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 BANK RAKYAT IND 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 BANK RAKYAT i.e., BANK RAKYAT and Telkom Indonesia go up and down completely randomly.
Pair Corralation between BANK RAKYAT and Telkom Indonesia
If you would invest 16.00 in Telkom Indonesia Tbk on August 24, 2024 and sell it today you would lose (1.00) from holding Telkom Indonesia Tbk or give up 6.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 1.54% |
| Values | Daily Returns |
BANK RAKYAT IND vs. Telkom Indonesia Tbk
Performance |
| Timeline |
| BANK RAKYAT IND |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Telkom Indonesia Tbk |
BANK RAKYAT and Telkom Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK RAKYAT and Telkom Indonesia
The main advantage of trading using opposite BANK RAKYAT and Telkom Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT 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.| BANK RAKYAT vs. Gold Road Resources | BANK RAKYAT vs. Gaztransport Technigaz SA | BANK RAKYAT vs. Transportadora de Gas | BANK RAKYAT vs. TRAINLINE PLC LS |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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