Correlation Between Perseus Mining and Telkom Indonesia
Can any of the company-specific risk be diversified away by investing in both Perseus Mining 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 Perseus Mining and Telkom Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perseus Mining Limited and Telkom Indonesia Tbk, you can compare the effects of market volatilities on Perseus Mining 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 Perseus Mining with a short position of Telkom Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Telkom Indonesia.
Diversification Opportunities for Perseus Mining and Telkom Indonesia
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Perseus and Telkom is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited 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 Perseus Mining 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 Perseus Mining Limited 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 Perseus Mining i.e., Perseus Mining and Telkom Indonesia go up and down completely randomly.
Pair Corralation between Perseus Mining and Telkom Indonesia
Assuming the 90 days horizon Perseus Mining Limited is expected to generate 0.46 times more return on investment than Telkom Indonesia. However, Perseus Mining Limited is 2.17 times less risky than Telkom Indonesia. It trades about 0.08 of its potential returns per unit of risk. Telkom Indonesia Tbk is currently generating about 0.01 per unit of risk. If you would invest 99.00 in Perseus Mining Limited on September 15, 2024 and sell it today you would earn a total of 65.00 from holding Perseus Mining Limited or generate 65.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perseus Mining Limited vs. Telkom Indonesia Tbk
Performance |
| Timeline |
| Perseus Mining |
| Telkom Indonesia Tbk |
Perseus Mining and Telkom Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and Telkom Indonesia
The main advantage of trading using opposite Perseus Mining and Telkom Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining 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.| Perseus Mining vs. United Insurance Holdings | Perseus Mining vs. Strategic Education | Perseus Mining vs. UNITED RENTALS | Perseus Mining vs. Zurich Insurance Group |
| Telkom Indonesia vs. Jacquet Metal Service | Telkom Indonesia vs. Perseus Mining Limited | Telkom Indonesia vs. SINGAPORE AIRLINES | Telkom Indonesia vs. International Consolidated Airlines |
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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