Correlation Between Telkom Indonesia and AURUBIS AG
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and AURUBIS AG 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 AURUBIS AG 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 AURUBIS AG UNSPADR, you can compare the effects of market volatilities on Telkom Indonesia and AURUBIS AG 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 AURUBIS AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and AURUBIS AG.
Diversification Opportunities for Telkom Indonesia and AURUBIS AG
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Telkom and AURUBIS is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and AURUBIS AG UNSPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AURUBIS AG UNSPADR 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 AURUBIS AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AURUBIS AG UNSPADR has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and AURUBIS AG go up and down completely randomly.
Pair Corralation between Telkom Indonesia and AURUBIS AG
Assuming the 90 days trading horizon Telkom Indonesia Tbk is expected to under-perform the AURUBIS AG. In addition to that, Telkom Indonesia is 2.22 times more volatile than AURUBIS AG UNSPADR. It trades about -0.01 of its total potential returns per unit of risk. AURUBIS AG UNSPADR is currently generating about -0.01 per unit of volatility. If you would invest 4,100 in AURUBIS AG UNSPADR on September 13, 2024 and sell it today you would lose (60.00) from holding AURUBIS AG UNSPADR or give up 1.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. AURUBIS AG UNSPADR
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| AURUBIS AG UNSPADR |
Telkom Indonesia and AURUBIS AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and AURUBIS AG
The main advantage of trading using opposite Telkom Indonesia and AURUBIS AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, AURUBIS AG 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 AURUBIS AG will offset losses from the drop in AURUBIS AG's long position.| Telkom Indonesia vs. BW OFFSHORE LTD | Telkom Indonesia vs. Eidesvik Offshore ASA | Telkom Indonesia vs. SOLSTAD OFFSHORE NK | Telkom Indonesia vs. WT OFFSHORE |
| AURUBIS AG vs. PROSIEBENSAT1 MEDIADR4 | AURUBIS AG vs. CNVISION MEDIA | AURUBIS AG vs. Flutter Entertainment PLC | AURUBIS AG vs. PennyMac Mortgage Investment |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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