Correlation Between Link Net and Smartfren Telecom
Can any of the company-specific risk be diversified away by investing in both Link Net and Smartfren Telecom 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 Link Net and Smartfren Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Link Net Tbk and Smartfren Telecom Tbk, you can compare the effects of market volatilities on Link Net and Smartfren Telecom 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 Link Net with a short position of Smartfren Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Link Net and Smartfren Telecom.
Diversification Opportunities for Link Net and Smartfren Telecom
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Link and Smartfren is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Link Net Tbk and Smartfren Telecom Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smartfren Telecom Tbk and Link Net 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 Link Net Tbk are associated (or correlated) with Smartfren Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smartfren Telecom Tbk has no effect on the direction of Link Net i.e., Link Net and Smartfren Telecom go up and down completely randomly.
Pair Corralation between Link Net and Smartfren Telecom
Assuming the 90 days trading horizon Link Net Tbk is expected to under-perform the Smartfren Telecom. In addition to that, Link Net is 1.16 times more volatile than Smartfren Telecom Tbk. It trades about -0.12 of its total potential returns per unit of risk. Smartfren Telecom Tbk is currently generating about -0.11 per unit of volatility. If you would invest 2,700 in Smartfren Telecom Tbk on August 24, 2024 and sell it today you would lose (200.00) from holding Smartfren Telecom Tbk or give up 7.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Link Net Tbk vs. Smartfren Telecom Tbk
Performance |
| Timeline |
| Link Net Tbk |
| Smartfren Telecom Tbk |
Link Net and Smartfren Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Link Net and Smartfren Telecom
The main advantage of trading using opposite Link Net and Smartfren Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Link Net position performs unexpectedly, Smartfren Telecom 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 Smartfren Telecom will offset losses from the drop in Smartfren Telecom's long position.| Link Net vs. Mnc Land Tbk | Link Net vs. MNC Vision Networks | Link Net vs. MD Pictures Tbk | Link Net vs. Medikaloka Hermina PT |
| Smartfren Telecom vs. Mnc Land Tbk | Smartfren Telecom vs. MNC Vision Networks | Smartfren Telecom vs. MD Pictures Tbk | Smartfren Telecom vs. Link Net 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |