Correlation Between Singapore Telecommunicatio and Telkom Indonesia
Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio 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 Singapore Telecommunicatio and Telkom Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singapore Telecommunications Limited and Telkom Indonesia Tbk, you can compare the effects of market volatilities on Singapore Telecommunicatio 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 Singapore Telecommunicatio with a short position of Telkom Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and Telkom Indonesia.
Diversification Opportunities for Singapore Telecommunicatio and Telkom Indonesia
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Singapore and Telkom is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L 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 Singapore Telecommunicatio 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 Singapore Telecommunications Limited 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 Singapore Telecommunicatio i.e., Singapore Telecommunicatio and Telkom Indonesia go up and down completely randomly.
Pair Corralation between Singapore Telecommunicatio and Telkom Indonesia
Assuming the 90 days horizon Singapore Telecommunications Limited is expected to generate 1.29 times more return on investment than Telkom Indonesia. However, Singapore Telecommunicatio is 1.29 times more volatile than Telkom Indonesia Tbk. It trades about 0.04 of its potential returns per unit of risk. Telkom Indonesia Tbk is currently generating about 0.02 per unit of risk. If you would invest 192.00 in Singapore Telecommunications Limited on August 24, 2024 and sell it today you would earn a total of 31.00 from holding Singapore Telecommunications Limited or generate 16.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.06% |
| Values | Daily Returns |
Singapore Telecommunications L vs. Telkom Indonesia Tbk
Performance |
| Timeline |
| Singapore Telecommunicatio |
| Telkom Indonesia Tbk |
Singapore Telecommunicatio and Telkom Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Telecommunicatio and Telkom Indonesia
The main advantage of trading using opposite Singapore Telecommunicatio and Telkom Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio 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.| Singapore Telecommunicatio vs. Airtel Africa Plc | Singapore Telecommunicatio vs. KDDI Corp | Singapore Telecommunicatio vs. Amrica Mvil, SAB | Singapore Telecommunicatio vs. Turk Telekomunikasyon AS |
| Telkom Indonesia vs. Vodafone Group PLC | Telkom Indonesia vs. KDDI Corp | Telkom Indonesia vs. Amrica Mvil, SAB | Telkom Indonesia vs. Singapore Telecommunications Limited |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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