Correlation Between Telkom Indonesia and Genesco
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Genesco 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 Genesco 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 Genesco, you can compare the effects of market volatilities on Telkom Indonesia and Genesco 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 Genesco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Genesco.
Diversification Opportunities for Telkom Indonesia and Genesco
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telkom and Genesco is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Genesco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesco 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 Genesco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genesco has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Genesco go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Genesco
Assuming the 90 days trading horizon Telkom Indonesia is expected to generate 5.28 times less return on investment than Genesco. In addition to that, Telkom Indonesia is 1.38 times more volatile than Genesco. It trades about 0.01 of its total potential returns per unit of risk. Genesco is currently generating about 0.09 per unit of volatility. If you would invest 2,700 in Genesco on August 31, 2024 and sell it today you would earn a total of 560.00 from holding Genesco or generate 20.74% 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. Genesco
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Genesco |
Telkom Indonesia and Genesco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Genesco
The main advantage of trading using opposite Telkom Indonesia and Genesco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Genesco 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 Genesco will offset losses from the drop in Genesco's long position.| Telkom Indonesia vs. Westinghouse Air Brake | Telkom Indonesia vs. Altair Engineering | Telkom Indonesia vs. Ryanair Holdings plc | Telkom Indonesia vs. XLMedia PLC |
| Genesco vs. LGI Homes | Genesco vs. American Homes 4 | Genesco vs. Dalata Hotel Group | Genesco vs. DFS Furniture PLC |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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