Correlation Between Samsung Electronics and Telkom Indonesia
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics 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 Samsung Electronics and Telkom Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Electronics Co and Telkom Indonesia Tbk, you can compare the effects of market volatilities on Samsung Electronics 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 Samsung Electronics with a short position of Telkom Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Telkom Indonesia.
Diversification Opportunities for Samsung Electronics and Telkom Indonesia
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samsung and Telkom is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co 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 Samsung Electronics 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 Samsung Electronics Co 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 Samsung Electronics i.e., Samsung Electronics and Telkom Indonesia go up and down completely randomly.
Pair Corralation between Samsung Electronics and Telkom Indonesia
Assuming the 90 days horizon Samsung Electronics Co is expected to generate 0.02 times more return on investment than Telkom Indonesia. However, Samsung Electronics Co is 56.55 times less risky than Telkom Indonesia. It trades about 0.1 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 4,007 in Samsung Electronics Co on September 1, 2024 and sell it today you would earn a total of 53.00 from holding Samsung Electronics Co or generate 1.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 86.17% |
| Values | Daily Returns |
Samsung Electronics Co vs. Telkom Indonesia Tbk
Performance |
| Timeline |
| Samsung Electronics |
| Telkom Indonesia Tbk |
Samsung Electronics and Telkom Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Telkom Indonesia
The main advantage of trading using opposite Samsung Electronics and Telkom Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics 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.| Samsung Electronics vs. Universal Electronics | Samsung Electronics vs. Vizio Holding Corp | Samsung Electronics vs. VOXX International | Samsung Electronics vs. Sony Group Corp |
| Telkom Indonesia vs. Verizon Communications | Telkom Indonesia vs. ATT Inc | Telkom Indonesia vs. Comcast Corp |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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