Correlation Between Telkom Indonesia and Sun Life
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Sun Life 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 Sun Life 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 Sun Life Financial, you can compare the effects of market volatilities on Telkom Indonesia and Sun Life 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 Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Sun Life.
Diversification Opportunities for Telkom Indonesia and Sun Life
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Telkom and Sun is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Sun Life Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Life Financial 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 Sun Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Life Financial has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Sun Life go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Sun Life
Assuming the 90 days trading horizon Telkom Indonesia is expected to generate 1.46 times less return on investment than Sun Life. In addition to that, Telkom Indonesia is 4.84 times more volatile than Sun Life Financial. It trades about 0.01 of its total potential returns per unit of risk. Sun Life Financial is currently generating about 0.08 per unit of volatility. If you would invest 3,953 in Sun Life Financial on August 25, 2024 and sell it today you would earn a total of 1,897 from holding Sun Life Financial or generate 47.99% 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. Sun Life Financial
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Sun Life Financial |
Telkom Indonesia and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Sun Life
The main advantage of trading using opposite Telkom Indonesia and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Sun Life 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 Sun Life will offset losses from the drop in Sun Life's long position.| Telkom Indonesia vs. TRAINLINE PLC LS | Telkom Indonesia vs. KAUFMAN ET BROAD | Telkom Indonesia vs. Transportadora de Gas | Telkom Indonesia vs. Texas Roadhouse |
| Sun Life vs. Berkshire Hathaway | Sun Life vs. Zurich Insurance Group | Sun Life vs. Superior Plus Corp | Sun Life vs. NMI Holdings |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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