Correlation Between TOTAL GABON and Telkom Indonesia
Can any of the company-specific risk be diversified away by investing in both TOTAL GABON 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 TOTAL GABON and Telkom Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TOTAL GABON and Telkom Indonesia Tbk, you can compare the effects of market volatilities on TOTAL GABON 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 TOTAL GABON with a short position of Telkom Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOTAL GABON and Telkom Indonesia.
Diversification Opportunities for TOTAL GABON and Telkom Indonesia
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TOTAL and Telkom is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding TOTAL GABON 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 TOTAL GABON 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 TOTAL GABON 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 TOTAL GABON i.e., TOTAL GABON and Telkom Indonesia go up and down completely randomly.
Pair Corralation between TOTAL GABON and Telkom Indonesia
Assuming the 90 days trading horizon TOTAL GABON is expected to generate 0.73 times more return on investment than Telkom Indonesia. However, TOTAL GABON is 1.37 times less risky than Telkom Indonesia. It trades about 0.21 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 15,750 in TOTAL GABON on September 12, 2024 and sell it today you would earn a total of 2,950 from holding TOTAL GABON or generate 18.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
TOTAL GABON vs. Telkom Indonesia Tbk
Performance |
| Timeline |
| TOTAL GABON |
| Telkom Indonesia Tbk |
TOTAL GABON and Telkom Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOTAL GABON and Telkom Indonesia
The main advantage of trading using opposite TOTAL GABON and Telkom Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOTAL GABON 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.| TOTAL GABON vs. TYSON FOODS A | TOTAL GABON vs. National Beverage Corp | TOTAL GABON vs. Food Life Companies | TOTAL GABON vs. SENECA FOODS A |
| Telkom Indonesia vs. GLG LIFE TECH | Telkom Indonesia vs. NORWEGIAN AIR SHUT | Telkom Indonesia vs. Westinghouse Air Brake | Telkom Indonesia vs. Wizz Air Holdings |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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