Correlation Between PT Indosat and Telia Company
Can any of the company-specific risk be diversified away by investing in both PT Indosat and Telia Company 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 PT Indosat and Telia Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Indosat Tbk and Telia Company AB, you can compare the effects of market volatilities on PT Indosat and Telia Company 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 PT Indosat with a short position of Telia Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Indosat and Telia Company.
Diversification Opportunities for PT Indosat and Telia Company
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PTITF and Telia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PT Indosat Tbk and Telia Company AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telia Company and PT Indosat 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 PT Indosat Tbk are associated (or correlated) with Telia Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telia Company has no effect on the direction of PT Indosat i.e., PT Indosat and Telia Company go up and down completely randomly.
Pair Corralation between PT Indosat and Telia Company
Assuming the 90 days horizon PT Indosat Tbk is expected to generate 23.2 times more return on investment than Telia Company. However, PT Indosat is 23.2 times more volatile than Telia Company AB. It trades about 0.19 of its potential returns per unit of risk. Telia Company AB is currently generating about 0.03 per unit of risk. If you would invest 40.00 in PT Indosat Tbk on August 26, 2024 and sell it today you would earn a total of 23.00 from holding PT Indosat Tbk or generate 57.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 60.54% |
| Values | Daily Returns |
PT Indosat Tbk vs. Telia Company AB
Performance |
| Timeline |
| PT Indosat Tbk |
| Telia Company |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
PT Indosat and Telia Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Indosat and Telia Company
The main advantage of trading using opposite PT Indosat and Telia Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Indosat position performs unexpectedly, Telia Company 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 Telia Company will offset losses from the drop in Telia Company's long position.| PT Indosat vs. Singapore Telecommunications Limited | PT Indosat vs. China Tower | PT Indosat vs. Vodafone Group PLC | PT Indosat vs. MTN Group Ltd |
| Telia Company vs. Nascent Wine | Telia Company vs. Constellation Brands Class | Telia Company vs. Celsius Holdings | Telia Company vs. Viemed Healthcare |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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