Correlation Between Mutual Of and Telkom Indonesia
Can any of the company-specific risk be diversified away by investing in both Mutual Of 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 Mutual Of and Telkom Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mutual Of America and Telkom Indonesia Tbk, you can compare the effects of market volatilities on Mutual Of 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 Mutual Of with a short position of Telkom Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mutual Of and Telkom Indonesia.
Diversification Opportunities for Mutual Of and Telkom Indonesia
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mutual and Telkom is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Mutual Of America 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 Mutual Of 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 Mutual Of America 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 Mutual Of i.e., Mutual Of and Telkom Indonesia go up and down completely randomly.
Pair Corralation between Mutual Of and Telkom Indonesia
Assuming the 90 days horizon Mutual Of America is expected to generate 0.31 times more return on investment than Telkom Indonesia. However, Mutual Of America is 3.27 times less risky than Telkom Indonesia. It trades about 0.07 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 1,345 in Mutual Of America on August 24, 2024 and sell it today you would earn a total of 59.00 from holding Mutual Of America or generate 4.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mutual Of America vs. Telkom Indonesia Tbk
Performance |
| Timeline |
| Mutual Of America |
| Telkom Indonesia Tbk |
Mutual Of and Telkom Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mutual Of and Telkom Indonesia
The main advantage of trading using opposite Mutual Of and Telkom Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mutual Of 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.| Mutual Of vs. Vanguard Target Retirement | Mutual Of vs. ABIVAX Socit Anonyme | Mutual Of vs. SCOR PK | Mutual Of vs. HUMANA INC |
| 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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