Correlation Between PT Sarana and Tele2 AB
Can any of the company-specific risk be diversified away by investing in both PT Sarana and Tele2 AB 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 Sarana and Tele2 AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Sarana Menara and Tele2 AB, you can compare the effects of market volatilities on PT Sarana and Tele2 AB 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 Sarana with a short position of Tele2 AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Sarana and Tele2 AB.
Diversification Opportunities for PT Sarana and Tele2 AB
Modest diversification
The 3 months correlation between SMNUF and Tele2 is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding PT Sarana Menara and Tele2 AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tele2 AB and PT Sarana 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 Sarana Menara are associated (or correlated) with Tele2 AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tele2 AB has no effect on the direction of PT Sarana i.e., PT Sarana and Tele2 AB go up and down completely randomly.
Pair Corralation between PT Sarana and Tele2 AB
Assuming the 90 days horizon PT Sarana Menara is expected to under-perform the Tele2 AB. In addition to that, PT Sarana is 3.78 times more volatile than Tele2 AB. It trades about -0.02 of its total potential returns per unit of risk. Tele2 AB is currently generating about 0.02 per unit of volatility. If you would invest 454.00 in Tele2 AB on August 29, 2024 and sell it today you would earn a total of 45.00 from holding Tele2 AB or generate 9.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 29.16% |
| Values | Daily Returns |
PT Sarana Menara vs. Tele2 AB
Performance |
| Timeline |
| PT Sarana Menara |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Tele2 AB |
PT Sarana and Tele2 AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Sarana and Tele2 AB
The main advantage of trading using opposite PT Sarana and Tele2 AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Sarana position performs unexpectedly, Tele2 AB 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 Tele2 AB will offset losses from the drop in Tele2 AB's long position.| PT Sarana vs. Proximus NV ADR | PT Sarana vs. Singapore Telecommunications Limited | PT Sarana vs. Telstra Limited | PT Sarana vs. MTN Group Ltd |
| Tele2 AB vs. Proximus NV ADR | Tele2 AB vs. Telstra Limited | Tele2 AB vs. Singapore Telecommunications Limited | Tele2 AB vs. Vodafone Group 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |