Correlation Between Partner Communications and Telkom Indonesia
Can any of the company-specific risk be diversified away by investing in both Partner Communications 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 Partner Communications and Telkom Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Partner Communications and Telkom Indonesia Tbk, you can compare the effects of market volatilities on Partner Communications 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 Partner Communications with a short position of Telkom Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Partner Communications and Telkom Indonesia.
Diversification Opportunities for Partner Communications and Telkom Indonesia
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Partner and Telkom is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Partner Communications 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 Partner Communications 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 Partner Communications 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 Partner Communications i.e., Partner Communications and Telkom Indonesia go up and down completely randomly.
Pair Corralation between Partner Communications and Telkom Indonesia
Assuming the 90 days horizon Partner Communications is expected to generate 2.73 times more return on investment than Telkom Indonesia. However, Partner Communications is 2.73 times more volatile than Telkom Indonesia Tbk. It trades about 0.03 of its potential returns per unit of risk. Telkom Indonesia Tbk is currently generating about -0.03 per unit of risk. If you would invest 462.00 in Partner Communications on September 3, 2024 and sell it today you would earn a total of 38.00 from holding Partner Communications or generate 8.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 43.03% |
| Values | Daily Returns |
Partner Communications vs. Telkom Indonesia Tbk
Performance |
| Timeline |
| Partner Communications |
| Telkom Indonesia Tbk |
Partner Communications and Telkom Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Partner Communications and Telkom Indonesia
The main advantage of trading using opposite Partner Communications and Telkom Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Partner Communications 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.| Partner Communications vs. Legacy Education | Partner Communications vs. Apple Inc | Partner Communications vs. NVIDIA | Partner Communications vs. Microsoft |
| Telkom Indonesia vs. Highway Holdings Limited | Telkom Indonesia vs. QCR Holdings | Telkom Indonesia vs. Partner Communications | Telkom Indonesia vs. Acumen Pharmaceuticals |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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