Correlation Between Procter Gamble and Telkom Indonesia
Can any of the company-specific risk be diversified away by investing in both Procter Gamble 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 Procter Gamble and Telkom Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Telkom Indonesia Tbk, you can compare the effects of market volatilities on Procter Gamble 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 Procter Gamble with a short position of Telkom Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Telkom Indonesia.
Diversification Opportunities for Procter Gamble and Telkom Indonesia
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Procter and Telkom is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble 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 Procter Gamble 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 Procter Gamble 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 Procter Gamble i.e., Procter Gamble and Telkom Indonesia go up and down completely randomly.
Pair Corralation between Procter Gamble and Telkom Indonesia
If you would invest 16,015 in Procter Gamble on November 18, 2024 and sell it today you would earn a total of 274.00 from holding Procter Gamble or generate 1.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 61.9% |
| Values | Daily Returns |
Procter Gamble vs. Telkom Indonesia Tbk
Performance |
| Timeline |
| Procter Gamble |
| Telkom Indonesia Tbk |
Procter Gamble and Telkom Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Telkom Indonesia
The main advantage of trading using opposite Procter Gamble and Telkom Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble 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.| Procter Gamble vs. The Clorox | Procter Gamble vs. Colgate Palmolive | Procter Gamble vs. Unilever PLC ADR | Procter Gamble vs. Church Dwight |
| Telkom Indonesia vs. Vodafone Group PLC | Telkom Indonesia vs. KDDI Corp | Telkom Indonesia vs. Amrica Mvil, SAB | Telkom Indonesia vs. Singapore Telecommunications Limited |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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