Correlation Between Telkom Indonesia and FIRST SAVINGS
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and FIRST SAVINGS 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 FIRST SAVINGS 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 FIRST SAVINGS FINL, you can compare the effects of market volatilities on Telkom Indonesia and FIRST SAVINGS 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 FIRST SAVINGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and FIRST SAVINGS.
Diversification Opportunities for Telkom Indonesia and FIRST SAVINGS
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Telkom and FIRST is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and FIRST SAVINGS FINL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRST SAVINGS FINL 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 FIRST SAVINGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRST SAVINGS FINL has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and FIRST SAVINGS go up and down completely randomly.
Pair Corralation between Telkom Indonesia and FIRST SAVINGS
Assuming the 90 days trading horizon Telkom Indonesia Tbk is expected to generate 3.41 times more return on investment than FIRST SAVINGS. However, Telkom Indonesia is 3.41 times more volatile than FIRST SAVINGS FINL. It trades about -0.02 of its potential returns per unit of risk. FIRST SAVINGS FINL is currently generating about -0.2 per unit of risk. If you would invest 17.00 in Telkom Indonesia Tbk on October 12, 2024 and sell it today you would lose (2.00) from holding Telkom Indonesia Tbk or give up 11.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. FIRST SAVINGS FINL
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| FIRST SAVINGS FINL |
Telkom Indonesia and FIRST SAVINGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and FIRST SAVINGS
The main advantage of trading using opposite Telkom Indonesia and FIRST SAVINGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, FIRST SAVINGS 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 FIRST SAVINGS will offset losses from the drop in FIRST SAVINGS's long position.| Telkom Indonesia vs. THAI BEVERAGE | Telkom Indonesia vs. Charter Communications | Telkom Indonesia vs. Highlight Communications AG | Telkom Indonesia vs. Monster Beverage Corp |
| FIRST SAVINGS vs. TRAINLINE PLC LS | FIRST SAVINGS vs. TITANIUM TRANSPORTGROUP | FIRST SAVINGS vs. Cleanaway Waste Management | FIRST SAVINGS vs. TYSON FOODS A |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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