Correlation Between Telkom Indonesia and CARDINAL HEALTH
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and CARDINAL HEALTH 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 CARDINAL HEALTH 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 CARDINAL HEALTH, you can compare the effects of market volatilities on Telkom Indonesia and CARDINAL HEALTH 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 CARDINAL HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and CARDINAL HEALTH.
Diversification Opportunities for Telkom Indonesia and CARDINAL HEALTH
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Telkom and CARDINAL is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and CARDINAL HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARDINAL HEALTH 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 CARDINAL HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CARDINAL HEALTH has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and CARDINAL HEALTH go up and down completely randomly.
Pair Corralation between Telkom Indonesia and CARDINAL HEALTH
Assuming the 90 days trading horizon Telkom Indonesia Tbk is expected to generate 9.99 times more return on investment than CARDINAL HEALTH. However, Telkom Indonesia is 9.99 times more volatile than CARDINAL HEALTH. It trades about 0.05 of its potential returns per unit of risk. CARDINAL HEALTH is currently generating about 0.05 per unit of risk. If you would invest 15.00 in Telkom Indonesia Tbk on October 10, 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. CARDINAL HEALTH
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| CARDINAL HEALTH |
Telkom Indonesia and CARDINAL HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and CARDINAL HEALTH
The main advantage of trading using opposite Telkom Indonesia and CARDINAL HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, CARDINAL HEALTH 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 CARDINAL HEALTH will offset losses from the drop in CARDINAL HEALTH's long position.| Telkom Indonesia vs. Nippon Telegraph and | Telkom Indonesia vs. Superior Plus Corp | Telkom Indonesia vs. NMI Holdings | Telkom Indonesia vs. SIVERS SEMICONDUCTORS AB |
| CARDINAL HEALTH vs. PENN NATL GAMING | CARDINAL HEALTH vs. Linedata Services SA | CARDINAL HEALTH vs. OURGAME INTHOLDL 00005 | CARDINAL HEALTH vs. NTT DATA |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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