Correlation Between PT Sarana and TelstraLimited
Can any of the company-specific risk be diversified away by investing in both PT Sarana and TelstraLimited 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 TelstraLimited 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 Telstra Limited, you can compare the effects of market volatilities on PT Sarana and TelstraLimited 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 TelstraLimited. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Sarana and TelstraLimited.
Diversification Opportunities for PT Sarana and TelstraLimited
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between SMNUF and TelstraLimited is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding PT Sarana Menara and Telstra Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telstra Limited 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 TelstraLimited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telstra Limited has no effect on the direction of PT Sarana i.e., PT Sarana and TelstraLimited go up and down completely randomly.
Pair Corralation between PT Sarana and TelstraLimited
If you would invest 3.00 in PT Sarana Menara on August 29, 2024 and sell it today you would earn a total of 0.00 from holding PT Sarana Menara or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
PT Sarana Menara vs. Telstra Limited
Performance |
| Timeline |
| PT Sarana Menara |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Telstra Limited |
PT Sarana and TelstraLimited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Sarana and TelstraLimited
The main advantage of trading using opposite PT Sarana and TelstraLimited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Sarana position performs unexpectedly, TelstraLimited 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 TelstraLimited will offset losses from the drop in TelstraLimited'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 |
| TelstraLimited vs. Proximus NV ADR | TelstraLimited vs. Singapore Telecommunications Limited | TelstraLimited vs. MTN Group Ltd | TelstraLimited vs. Tele2 AB |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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