Correlation Between Telkom Indonesia and Welltower
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Welltower 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 Welltower 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 Welltower, you can compare the effects of market volatilities on Telkom Indonesia and Welltower 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 Welltower. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Welltower.
Diversification Opportunities for Telkom Indonesia and Welltower
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Telkom and Welltower is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Welltower in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Welltower 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 Welltower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Welltower has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Welltower go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Welltower
Assuming the 90 days trading horizon Telkom Indonesia Tbk is expected to under-perform the Welltower. In addition to that, Telkom Indonesia is 3.86 times more volatile than Welltower. It trades about -0.02 of its total potential returns per unit of risk. Welltower is currently generating about 0.29 per unit of volatility. If you would invest 11,992 in Welltower on August 29, 2024 and sell it today you would earn a total of 1,223 from holding Welltower or generate 10.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Welltower
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Welltower |
Telkom Indonesia and Welltower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Welltower
The main advantage of trading using opposite Telkom Indonesia and Welltower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Welltower 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 Welltower will offset losses from the drop in Welltower's long position.| Telkom Indonesia vs. Verizon Communications | Telkom Indonesia vs. ATT Inc | Telkom Indonesia vs. ATT Inc | Telkom Indonesia vs. Deutsche Telekom AG |
| Welltower vs. Retail Estates NV | Welltower vs. COSTCO WHOLESALE CDR | Welltower vs. Ross Stores | Welltower vs. SALESFORCE INC CDR |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |