Correlation Between Smurfit Kappa and Telkom Indonesia
Can any of the company-specific risk be diversified away by investing in both Smurfit Kappa 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 Smurfit Kappa and Telkom Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smurfit Kappa Group and Telkom Indonesia Tbk, you can compare the effects of market volatilities on Smurfit Kappa 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 Smurfit Kappa with a short position of Telkom Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smurfit Kappa and Telkom Indonesia.
Diversification Opportunities for Smurfit Kappa and Telkom Indonesia
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Smurfit and Telkom is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Smurfit Kappa Group 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 Smurfit Kappa 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 Smurfit Kappa Group 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 Smurfit Kappa i.e., Smurfit Kappa and Telkom Indonesia go up and down completely randomly.
Pair Corralation between Smurfit Kappa and Telkom Indonesia
Assuming the 90 days horizon Smurfit Kappa Group is expected to generate 0.39 times more return on investment than Telkom Indonesia. However, Smurfit Kappa Group is 2.57 times less risky than Telkom Indonesia. It trades about 0.08 of its potential returns per unit of risk. Telkom Indonesia Tbk is currently generating about 0.01 per unit of risk. If you would invest 3,732 in Smurfit Kappa Group on September 1, 2024 and sell it today you would earn a total of 1,338 from holding Smurfit Kappa Group or generate 35.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smurfit Kappa Group vs. Telkom Indonesia Tbk
Performance |
| Timeline |
| Smurfit Kappa Group |
| Telkom Indonesia Tbk |
Smurfit Kappa and Telkom Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smurfit Kappa and Telkom Indonesia
The main advantage of trading using opposite Smurfit Kappa and Telkom Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smurfit Kappa 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.| Smurfit Kappa vs. Packaging of | Smurfit Kappa vs. Superior Plus Corp | Smurfit Kappa vs. Origin Agritech | Smurfit Kappa vs. Identiv |
| Telkom Indonesia vs. Molson Coors Beverage | Telkom Indonesia vs. HomeToGo SE | Telkom Indonesia vs. MAVEN WIRELESS SWEDEN | Telkom Indonesia vs. Fevertree Drinks PLC |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Stocks Directory Find actively traded stocks across global markets | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |