Correlation Between Cable One and Telkom Indonesia
Can any of the company-specific risk be diversified away by investing in both Cable One 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 Cable One and Telkom Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cable One and Telkom Indonesia Tbk, you can compare the effects of market volatilities on Cable One 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 Cable One with a short position of Telkom Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cable One and Telkom Indonesia.
Diversification Opportunities for Cable One and Telkom Indonesia
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cable and Telkom is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Cable One 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 Cable One 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 Cable One 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 Cable One i.e., Cable One and Telkom Indonesia go up and down completely randomly.
Pair Corralation between Cable One and Telkom Indonesia
Given the investment horizon of 90 days Cable One is expected to generate 1.68 times more return on investment than Telkom Indonesia. However, Cable One is 1.68 times more volatile than Telkom Indonesia Tbk. It trades about 0.2 of its potential returns per unit of risk. Telkom Indonesia Tbk is currently generating about -0.24 per unit of risk. If you would invest 34,804 in Cable One on August 23, 2024 and sell it today you would earn a total of 5,481 from holding Cable One or generate 15.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cable One vs. Telkom Indonesia Tbk
Performance |
| Timeline |
| Cable One |
| Telkom Indonesia Tbk |
Cable One and Telkom Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cable One and Telkom Indonesia
The main advantage of trading using opposite Cable One and Telkom Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cable One 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.| Cable One vs. Small Cap Core | Cable One vs. FitLife Brands, Common | Cable One vs. Mutual Of America | Cable One vs. Gfl Environmental Holdings |
| Telkom Indonesia vs. Small Cap Core | Telkom Indonesia vs. FitLife Brands, Common | Telkom Indonesia vs. Mutual Of America | Telkom Indonesia vs. Gfl Environmental Holdings |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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