Correlation Between Telkom Indonesia and News
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and News 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 News 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 News Corporation, you can compare the effects of market volatilities on Telkom Indonesia and News 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 News. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and News.
Diversification Opportunities for Telkom Indonesia and News
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Telkom and News is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and News Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on News 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 News. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of News has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and News go up and down completely randomly.
Pair Corralation between Telkom Indonesia and News
Assuming the 90 days trading horizon Telkom Indonesia is expected to generate 1.15 times less return on investment than News. In addition to that, Telkom Indonesia is 3.51 times more volatile than News Corporation. It trades about 0.08 of its total potential returns per unit of risk. News Corporation is currently generating about 0.31 per unit of volatility. If you would invest 2,480 in News Corporation on September 1, 2024 and sell it today you would earn a total of 280.00 from holding News Corporation or generate 11.29% 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. News Corp.
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| News |
Telkom Indonesia and News Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and News
The main advantage of trading using opposite Telkom Indonesia and News positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, News 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 News will offset losses from the drop in News' long position.| Telkom Indonesia vs. Molson Coors Beverage | Telkom Indonesia vs. HomeToGo SE | Telkom Indonesia vs. MAVEN WIRELESS SWEDEN | Telkom Indonesia vs. Fevertree Drinks PLC |
| News vs. Superior Plus Corp | News vs. NMI Holdings | News vs. Origin Agritech | News vs. SIVERS SEMICONDUCTORS AB |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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