Correlation Between Jakarta Int and Telkom Indonesia
Can any of the company-specific risk be diversified away by investing in both Jakarta Int 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 Jakarta Int and Telkom Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jakarta Int Hotels and Telkom Indonesia Tbk, you can compare the effects of market volatilities on Jakarta Int 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 Jakarta Int with a short position of Telkom Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jakarta Int and Telkom Indonesia.
Diversification Opportunities for Jakarta Int and Telkom Indonesia
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Jakarta and Telkom is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Jakarta Int Hotels 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 Jakarta Int 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 Jakarta Int Hotels 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 Jakarta Int i.e., Jakarta Int and Telkom Indonesia go up and down completely randomly.
Pair Corralation between Jakarta Int and Telkom Indonesia
Assuming the 90 days trading horizon Jakarta Int Hotels is expected to generate 4.75 times more return on investment than Telkom Indonesia. However, Jakarta Int is 4.75 times more volatile than Telkom Indonesia Tbk. It trades about 0.64 of its potential returns per unit of risk. Telkom Indonesia Tbk is currently generating about -0.12 per unit of risk. If you would invest 61,000 in Jakarta Int Hotels on August 31, 2024 and sell it today you would earn a total of 177,000 from holding Jakarta Int Hotels or generate 290.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jakarta Int Hotels vs. Telkom Indonesia Tbk
Performance |
| Timeline |
| Jakarta Int Hotels |
| Telkom Indonesia Tbk |
Jakarta Int and Telkom Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jakarta Int and Telkom Indonesia
The main advantage of trading using opposite Jakarta Int and Telkom Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jakarta Int 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.| Jakarta Int vs. Jaya Real Property | Jakarta Int vs. Mnc Land Tbk | Jakarta Int vs. Kawasan Industri Jababeka | Jakarta Int vs. Duta Pertiwi Tbk |
| Telkom Indonesia vs. Indosat Tbk | Telkom Indonesia vs. XL Axiata Tbk | Telkom Indonesia vs. Energi Mega Persada | Telkom Indonesia vs. Bakrie Brothers Tbk |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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