Correlation Between Telkom Indonesia and Event Hospitality
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Event Hospitality 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 Event Hospitality 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 Event Hospitality and, you can compare the effects of market volatilities on Telkom Indonesia and Event Hospitality 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 Event Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Event Hospitality.
Diversification Opportunities for Telkom Indonesia and Event Hospitality
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Telkom and Event is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Event Hospitality and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Event Hospitality 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 Event Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Event Hospitality has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Event Hospitality go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Event Hospitality
Assuming the 90 days trading horizon Telkom Indonesia Tbk is expected to generate 3.06 times more return on investment than Event Hospitality. However, Telkom Indonesia is 3.06 times more volatile than Event Hospitality and. It trades about 0.01 of its potential returns per unit of risk. Event Hospitality and is currently generating about 0.0 per unit of risk. If you would invest 22.00 in Telkom Indonesia Tbk on September 3, 2024 and sell it today you would lose (7.00) from holding Telkom Indonesia Tbk or give up 31.82% 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. Event Hospitality and
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Event Hospitality |
Telkom Indonesia and Event Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Event Hospitality
The main advantage of trading using opposite Telkom Indonesia and Event Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Event Hospitality 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 Event Hospitality will offset losses from the drop in Event Hospitality's long position.| Telkom Indonesia vs. SENECA FOODS A | Telkom Indonesia vs. Astral Foods Limited | Telkom Indonesia vs. THAI BEVERAGE | Telkom Indonesia vs. JJ SNACK FOODS |
| Event Hospitality vs. Southwest Airlines Co | Event Hospitality vs. SOUTHWEST AIRLINES | Event Hospitality vs. Australian Agricultural | Event Hospitality vs. SINGAPORE AIRLINES |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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