Correlation Between Telkom Indonesia and AS Latvijas
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and AS Latvijas 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 Telkom Indonesia and AS Latvijas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telkom Indonesia Tbk and AS Latvijas balzams, you can compare the effects of market volatilities on Telkom Indonesia and AS Latvijas 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 Telkom Indonesia with a short position of AS Latvijas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and AS Latvijas.
Diversification Opportunities for Telkom Indonesia and AS Latvijas
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Telkom and UM9 is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and AS Latvijas balzams in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AS Latvijas balzams and Telkom Indonesia 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 Telkom Indonesia Tbk are associated (or correlated) with AS Latvijas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AS Latvijas balzams has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and AS Latvijas go up and down completely randomly.
Pair Corralation between Telkom Indonesia and AS Latvijas
Assuming the 90 days trading horizon Telkom Indonesia Tbk is expected to under-perform the AS Latvijas. In addition to that, Telkom Indonesia is 11.31 times more volatile than AS Latvijas balzams. It trades about -0.06 of its total potential returns per unit of risk. AS Latvijas balzams is currently generating about 0.21 per unit of volatility. If you would invest 900.00 in AS Latvijas balzams on August 31, 2024 and sell it today you would earn a total of 15.00 from holding AS Latvijas balzams or generate 1.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. AS Latvijas balzams
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| AS Latvijas balzams |
Telkom Indonesia and AS Latvijas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and AS Latvijas
The main advantage of trading using opposite Telkom Indonesia and AS Latvijas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, AS Latvijas 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 AS Latvijas will offset losses from the drop in AS Latvijas' long position.| Telkom Indonesia vs. SIVERS SEMICONDUCTORS AB | Telkom Indonesia vs. Darden Restaurants | Telkom Indonesia vs. Reliance Steel Aluminum | Telkom Indonesia vs. Q2M Managementberatung AG |
| AS Latvijas vs. Fukuyama Transporting Co | AS Latvijas vs. AIR PRODCHEMICALS | AS Latvijas vs. NISSAN CHEMICAL IND | AS Latvijas vs. TITANIUM TRANSPORTGROUP |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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