Correlation Between Fast Retailing and Telkom Indonesia
Can any of the company-specific risk be diversified away by investing in both Fast Retailing 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 Fast Retailing and Telkom Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fast Retailing Co and Telkom Indonesia Tbk, you can compare the effects of market volatilities on Fast Retailing 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 Fast Retailing with a short position of Telkom Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Retailing and Telkom Indonesia.
Diversification Opportunities for Fast Retailing and Telkom Indonesia
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fast and Telkom is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Fast Retailing Co 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 Fast Retailing 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 Fast Retailing Co 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 Fast Retailing i.e., Fast Retailing and Telkom Indonesia go up and down completely randomly.
Pair Corralation between Fast Retailing and Telkom Indonesia
Assuming the 90 days trading horizon Fast Retailing Co is expected to generate 0.48 times more return on investment than Telkom Indonesia. However, Fast Retailing Co is 2.09 times less risky than Telkom Indonesia. It trades about 0.18 of its potential returns per unit of risk. Telkom Indonesia Tbk is currently generating about 0.02 per unit of risk. If you would invest 29,770 in Fast Retailing Co on September 3, 2024 and sell it today you would earn a total of 2,060 from holding Fast Retailing Co or generate 6.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fast Retailing Co vs. Telkom Indonesia Tbk
Performance |
| Timeline |
| Fast Retailing |
| Telkom Indonesia Tbk |
Fast Retailing and Telkom Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Retailing and Telkom Indonesia
The main advantage of trading using opposite Fast Retailing and Telkom Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Retailing 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.| Fast Retailing vs. TOTAL GABON | Fast Retailing vs. Walgreens Boots Alliance | Fast Retailing vs. Peak Resources Limited |
| Telkom Indonesia vs. FAST RETAIL ADR | Telkom Indonesia vs. Costco Wholesale Corp | Telkom Indonesia vs. Sixt Leasing SE | Telkom Indonesia vs. MARKET VECTR RETAIL |
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..
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |