Correlation Between THAI BEVERAGE and Telkom Indonesia
Can any of the company-specific risk be diversified away by investing in both THAI BEVERAGE 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 THAI BEVERAGE and Telkom Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THAI BEVERAGE and Telkom Indonesia Tbk, you can compare the effects of market volatilities on THAI BEVERAGE 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 THAI BEVERAGE with a short position of Telkom Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of THAI BEVERAGE and Telkom Indonesia.
Diversification Opportunities for THAI BEVERAGE and Telkom Indonesia
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between THAI and Telkom is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE 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 THAI BEVERAGE 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 THAI BEVERAGE 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 THAI BEVERAGE i.e., THAI BEVERAGE and Telkom Indonesia go up and down completely randomly.
Pair Corralation between THAI BEVERAGE and Telkom Indonesia
Assuming the 90 days trading horizon THAI BEVERAGE is expected to generate 0.42 times more return on investment than Telkom Indonesia. However, THAI BEVERAGE is 2.38 times less risky than Telkom Indonesia. It trades about 0.04 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 36.00 in THAI BEVERAGE on September 12, 2024 and sell it today you would earn a total of 2.00 from holding THAI BEVERAGE or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
THAI BEVERAGE vs. Telkom Indonesia Tbk
Performance |
| Timeline |
| THAI BEVERAGE |
| Telkom Indonesia Tbk |
THAI BEVERAGE and Telkom Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THAI BEVERAGE and Telkom Indonesia
The main advantage of trading using opposite THAI BEVERAGE and Telkom Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THAI BEVERAGE 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.| THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc |
| Telkom Indonesia vs. Singapore Telecommunications Limited | Telkom Indonesia vs. Ribbon Communications | Telkom Indonesia vs. Tower Semiconductor | Telkom Indonesia vs. Spirent Communications 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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