Correlation Between Telkom Indonesia and BANGCHAK CORP
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and BANGCHAK CORP 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 BANGCHAK CORP 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 BANGCHAK P FGN , you can compare the effects of market volatilities on Telkom Indonesia and BANGCHAK CORP 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 BANGCHAK CORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and BANGCHAK CORP.
Diversification Opportunities for Telkom Indonesia and BANGCHAK CORP
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Telkom and BANGCHAK is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and BANGCHAK P FGN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANGCHAK P FGN 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 BANGCHAK CORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANGCHAK P FGN has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and BANGCHAK CORP go up and down completely randomly.
Pair Corralation between Telkom Indonesia and BANGCHAK CORP
Assuming the 90 days trading horizon Telkom Indonesia Tbk is expected to under-perform the BANGCHAK CORP. In addition to that, Telkom Indonesia is 2.03 times more volatile than BANGCHAK P FGN . It trades about -0.14 of its total potential returns per unit of risk. BANGCHAK P FGN is currently generating about 0.01 per unit of volatility. If you would invest 99.00 in BANGCHAK P FGN on January 9, 2025 and sell it today you would earn a total of 0.00 from holding BANGCHAK P FGN or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. BANGCHAK P FGN
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| BANGCHAK P FGN |
Telkom Indonesia and BANGCHAK CORP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and BANGCHAK CORP
The main advantage of trading using opposite Telkom Indonesia and BANGCHAK CORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, BANGCHAK CORP 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 BANGCHAK CORP will offset losses from the drop in BANGCHAK CORP's long position.| Telkom Indonesia vs. T Mobile | Telkom Indonesia vs. China Mobile Limited | Telkom Indonesia vs. Verizon Communications | Telkom Indonesia vs. ATT Inc |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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