Correlation Between Telkom Indonesia and Hoist Finance
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Hoist Finance 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 Hoist Finance 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 Hoist Finance AB, you can compare the effects of market volatilities on Telkom Indonesia and Hoist Finance 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 Hoist Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Hoist Finance.
Diversification Opportunities for Telkom Indonesia and Hoist Finance
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telkom and Hoist is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Hoist Finance AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoist Finance AB 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 Hoist Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoist Finance AB has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Hoist Finance go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Hoist Finance
Assuming the 90 days trading horizon Telkom Indonesia Tbk is expected to generate 2.6 times more return on investment than Hoist Finance. However, Telkom Indonesia is 2.6 times more volatile than Hoist Finance AB. It trades about 0.04 of its potential returns per unit of risk. Hoist Finance AB is currently generating about 0.07 per unit of risk. If you would invest 16.00 in Telkom Indonesia Tbk on October 14, 2024 and sell it today you would earn a total of 0.00 from holding Telkom Indonesia Tbk or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Hoist Finance AB
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Hoist Finance AB |
Telkom Indonesia and Hoist Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Hoist Finance
The main advantage of trading using opposite Telkom Indonesia and Hoist Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Hoist Finance 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 Hoist Finance will offset losses from the drop in Hoist Finance's long position.| Telkom Indonesia vs. Taylor Morrison Home | Telkom Indonesia vs. Addus HomeCare | Telkom Indonesia vs. OFFICE DEPOT | Telkom Indonesia vs. CITY OFFICE REIT |
| Hoist Finance vs. FIRST SAVINGS FINL | Hoist Finance vs. NetSol Technologies | Hoist Finance vs. Digilife Technologies Limited | Hoist Finance vs. CHRYSALIS INVESTMENTS LTD |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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