Correlation Between Ross Stores and Telkom Indonesia
Can any of the company-specific risk be diversified away by investing in both Ross Stores 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 Ross Stores and Telkom Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ross Stores and Telkom Indonesia Tbk, you can compare the effects of market volatilities on Ross Stores 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 Ross Stores with a short position of Telkom Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ross Stores and Telkom Indonesia.
Diversification Opportunities for Ross Stores and Telkom Indonesia
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ross and Telkom is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Ross Stores 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 Ross Stores 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 Ross Stores 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 Ross Stores i.e., Ross Stores and Telkom Indonesia go up and down completely randomly.
Pair Corralation between Ross Stores and Telkom Indonesia
Assuming the 90 days trading horizon Ross Stores is expected to generate 0.32 times more return on investment than Telkom Indonesia. However, Ross Stores is 3.13 times less risky than Telkom Indonesia. It trades about 0.04 of its potential returns per unit of risk. Telkom Indonesia Tbk is currently generating about -0.07 per unit of risk. If you would invest 14,722 in Ross Stores on October 13, 2024 and sell it today you would earn a total of 126.00 from holding Ross Stores or generate 0.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ross Stores vs. Telkom Indonesia Tbk
Performance |
| Timeline |
| Ross Stores |
| Telkom Indonesia Tbk |
Ross Stores and Telkom Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ross Stores and Telkom Indonesia
The main advantage of trading using opposite Ross Stores and Telkom Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ross Stores 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.| Ross Stores vs. Apple Inc | Ross Stores vs. Apple Inc | Ross Stores vs. Apple Inc | Ross Stores vs. Apple Inc |
| Telkom Indonesia vs. Delta Electronics Public | Telkom Indonesia vs. Ross Stores | Telkom Indonesia vs. Nucletron Electronic Aktiengesellschaft | Telkom Indonesia vs. MARKET VECTR RETAIL |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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