Correlation Between PENN NATL and Telkom Indonesia
Can any of the company-specific risk be diversified away by investing in both PENN NATL 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 PENN NATL and Telkom Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PENN NATL GAMING and Telkom Indonesia Tbk, you can compare the effects of market volatilities on PENN NATL 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 PENN NATL with a short position of Telkom Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of PENN NATL and Telkom Indonesia.
Diversification Opportunities for PENN NATL and Telkom Indonesia
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PENN and Telkom is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding PENN NATL GAMING 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 PENN NATL 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 PENN NATL GAMING 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 PENN NATL i.e., PENN NATL and Telkom Indonesia go up and down completely randomly.
Pair Corralation between PENN NATL and Telkom Indonesia
Assuming the 90 days trading horizon PENN NATL GAMING is expected to generate 0.85 times more return on investment than Telkom Indonesia. However, PENN NATL GAMING is 1.18 times less risky than Telkom Indonesia. It trades about 0.22 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 1,769 in PENN NATL GAMING on October 20, 2024 and sell it today you would earn a total of 207.00 from holding PENN NATL GAMING or generate 11.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PENN NATL GAMING vs. Telkom Indonesia Tbk
Performance |
| Timeline |
| PENN NATL GAMING |
| Telkom Indonesia Tbk |
PENN NATL and Telkom Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PENN NATL and Telkom Indonesia
The main advantage of trading using opposite PENN NATL and Telkom Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENN NATL 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.| PENN NATL vs. ITALIAN WINE BRANDS | PENN NATL vs. Zoom Video Communications | PENN NATL vs. FIH MOBILE | PENN NATL vs. Geely Automobile Holdings |
| Telkom Indonesia vs. MOVIE GAMES SA | Telkom Indonesia vs. FRACTAL GAMING GROUP | Telkom Indonesia vs. PENN NATL GAMING | Telkom Indonesia vs. Scientific Games |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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