Correlation Between Telkom Indonesia and AmerisourceBergen
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and AmerisourceBergen 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 AmerisourceBergen 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 AmerisourceBergen, you can compare the effects of market volatilities on Telkom Indonesia and AmerisourceBergen 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 AmerisourceBergen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and AmerisourceBergen.
Diversification Opportunities for Telkom Indonesia and AmerisourceBergen
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Telkom and AmerisourceBergen is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and AmerisourceBergen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AmerisourceBergen 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 AmerisourceBergen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AmerisourceBergen has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and AmerisourceBergen go up and down completely randomly.
Pair Corralation between Telkom Indonesia and AmerisourceBergen
Assuming the 90 days trading horizon Telkom Indonesia Tbk is expected to generate 5.91 times more return on investment than AmerisourceBergen. However, Telkom Indonesia is 5.91 times more volatile than AmerisourceBergen. It trades about -0.01 of its potential returns per unit of risk. AmerisourceBergen is currently generating about -0.1 per unit of risk. If you would invest 16.00 in Telkom Indonesia Tbk on September 12, 2024 and sell it today you would lose (1.00) from holding Telkom Indonesia Tbk or give up 6.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. AmerisourceBergen
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| AmerisourceBergen |
Telkom Indonesia and AmerisourceBergen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and AmerisourceBergen
The main advantage of trading using opposite Telkom Indonesia and AmerisourceBergen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, AmerisourceBergen 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 AmerisourceBergen will offset losses from the drop in AmerisourceBergen's long position.| Telkom Indonesia vs. Singapore Telecommunications Limited | Telkom Indonesia vs. Ribbon Communications | Telkom Indonesia vs. Tower Semiconductor | Telkom Indonesia vs. Spirent Communications plc |
| AmerisourceBergen vs. X FAB Silicon Foundries | AmerisourceBergen vs. TIANDE CHEMICAL | AmerisourceBergen vs. Sekisui Chemical Co | AmerisourceBergen vs. GALENA MINING 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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