Correlation Between Telkom Indonesia and GWILLI FOOD
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and GWILLI FOOD 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 GWILLI FOOD 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 GWILLI FOOD, you can compare the effects of market volatilities on Telkom Indonesia and GWILLI FOOD 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 GWILLI FOOD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and GWILLI FOOD.
Diversification Opportunities for Telkom Indonesia and GWILLI FOOD
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telkom and GWILLI is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and GWILLI FOOD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GWILLI FOOD 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 GWILLI FOOD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GWILLI FOOD has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and GWILLI FOOD go up and down completely randomly.
Pair Corralation between Telkom Indonesia and GWILLI FOOD
Assuming the 90 days trading horizon Telkom Indonesia is expected to generate 3.99 times less return on investment than GWILLI FOOD. In addition to that, Telkom Indonesia is 1.94 times more volatile than GWILLI FOOD. It trades about 0.02 of its total potential returns per unit of risk. GWILLI FOOD is currently generating about 0.14 per unit of volatility. If you would invest 895.00 in GWILLI FOOD on October 25, 2024 and sell it today you would earn a total of 645.00 from holding GWILLI FOOD or generate 72.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. GWILLI FOOD
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| GWILLI FOOD |
Telkom Indonesia and GWILLI FOOD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and GWILLI FOOD
The main advantage of trading using opposite Telkom Indonesia and GWILLI FOOD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, GWILLI FOOD 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 GWILLI FOOD will offset losses from the drop in GWILLI FOOD's long position.| Telkom Indonesia vs. ANTA SPORTS PRODUCT | Telkom Indonesia vs. Micron Technology | Telkom Indonesia vs. Align Technology | Telkom Indonesia vs. MACOM Technology Solutions |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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