Correlation Between Telkom Indonesia and Penn National
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Penn National 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 Penn National 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 Penn National Gaming, you can compare the effects of market volatilities on Telkom Indonesia and Penn National 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 Penn National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Penn National.
Diversification Opportunities for Telkom Indonesia and Penn National
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telkom and Penn is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Penn National Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penn National Gaming 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 Penn National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penn National Gaming has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Penn National go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Penn National
Assuming the 90 days trading horizon Telkom Indonesia Tbk is expected to under-perform the Penn National. In addition to that, Telkom Indonesia is 2.6 times more volatile than Penn National Gaming. It trades about -0.05 of its total potential returns per unit of risk. Penn National Gaming is currently generating about 0.14 per unit of volatility. If you would invest 1,781 in Penn National Gaming on October 23, 2024 and sell it today you would earn a total of 130.00 from holding Penn National Gaming or generate 7.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Penn National Gaming
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Penn National Gaming |
Telkom Indonesia and Penn National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Penn National
The main advantage of trading using opposite Telkom Indonesia and Penn National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Penn National 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 Penn National will offset losses from the drop in Penn National's long position.| Telkom Indonesia vs. CDN IMPERIAL BANK | Telkom Indonesia vs. BANK OF CHINA | Telkom Indonesia vs. Cincinnati Financial Corp | Telkom Indonesia vs. CHIBA BANK |
| Penn National vs. Apollo Medical Holdings | Penn National vs. Datadog | Penn National vs. MICRONIC MYDATA | Penn National vs. Northern Data AG |
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 CEOs Directory module to screen CEOs from public companies around the world.
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