Correlation Between Ooma and Telkom Indonesia
Can any of the company-specific risk be diversified away by investing in both Ooma 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 Ooma and Telkom Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ooma Inc and Telkom Indonesia Tbk, you can compare the effects of market volatilities on Ooma 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 Ooma with a short position of Telkom Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ooma and Telkom Indonesia.
Diversification Opportunities for Ooma and Telkom Indonesia
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ooma and Telkom is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Ooma Inc 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 Ooma 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 Ooma Inc 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 Ooma i.e., Ooma and Telkom Indonesia go up and down completely randomly.
Pair Corralation between Ooma and Telkom Indonesia
Given the investment horizon of 90 days Ooma Inc is expected to generate 0.99 times more return on investment than Telkom Indonesia. However, Ooma Inc is 1.01 times less risky than Telkom Indonesia. It trades about 0.34 of its potential returns per unit of risk. Telkom Indonesia Tbk is currently generating about -0.16 per unit of risk. If you would invest 1,232 in Ooma Inc on August 27, 2024 and sell it today you would earn a total of 189.00 from holding Ooma Inc or generate 15.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ooma Inc vs. Telkom Indonesia Tbk
Performance |
| Timeline |
| Ooma Inc |
| Telkom Indonesia Tbk |
Ooma and Telkom Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ooma and Telkom Indonesia
The main advantage of trading using opposite Ooma and Telkom Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ooma 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.| Ooma vs. Shenandoah Telecommunications Co | Ooma vs. Anterix | Ooma vs. Liberty Broadband Corp | Ooma vs. IDT Corporation |
| Telkom Indonesia vs. Liberty Broadband Srs | Telkom Indonesia vs. Ribbon Communications | Telkom Indonesia vs. Liberty Broadband Srs | Telkom Indonesia vs. Shenandoah Telecommunications Co |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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