Correlation Between Telkom Indonesia and CBRE GROUP-A
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and CBRE GROUP-A 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 CBRE GROUP-A 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 CBRE GROUP A, you can compare the effects of market volatilities on Telkom Indonesia and CBRE GROUP-A 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 CBRE GROUP-A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and CBRE GROUP-A.
Diversification Opportunities for Telkom Indonesia and CBRE GROUP-A
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Telkom and CBRE is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and CBRE GROUP A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBRE GROUP A 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 CBRE GROUP-A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBRE GROUP A has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and CBRE GROUP-A go up and down completely randomly.
Pair Corralation between Telkom Indonesia and CBRE GROUP-A
Assuming the 90 days trading horizon Telkom Indonesia is expected to generate 2.48 times less return on investment than CBRE GROUP-A. In addition to that, Telkom Indonesia is 3.15 times more volatile than CBRE GROUP A. It trades about 0.01 of its total potential returns per unit of risk. CBRE GROUP A is currently generating about 0.08 per unit of volatility. If you would invest 7,428 in CBRE GROUP A on September 4, 2024 and sell it today you would earn a total of 5,872 from holding CBRE GROUP A or generate 79.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. CBRE GROUP A
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| CBRE GROUP A |
Telkom Indonesia and CBRE GROUP-A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and CBRE GROUP-A
The main advantage of trading using opposite Telkom Indonesia and CBRE GROUP-A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, CBRE GROUP-A 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 CBRE GROUP-A will offset losses from the drop in CBRE GROUP-A's long position.| Telkom Indonesia vs. G III Apparel Group | Telkom Indonesia vs. KIMBALL ELECTRONICS | Telkom Indonesia vs. Methode Electronics | Telkom Indonesia vs. Benchmark Electronics |
| CBRE GROUP-A vs. Penn National Gaming | CBRE GROUP-A vs. AUSNUTRIA DAIRY | CBRE GROUP-A vs. SENECA FOODS A | CBRE GROUP-A vs. United Natural Foods |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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