Correlation Between Telkom Indonesia and Tesla
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Tesla 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 Tesla 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 Tesla Inc, you can compare the effects of market volatilities on Telkom Indonesia and Tesla 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 Tesla. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Tesla.
Diversification Opportunities for Telkom Indonesia and Tesla
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Telkom and Tesla is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Tesla Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tesla Inc 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 Tesla. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tesla Inc has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Tesla go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Tesla
Assuming the 90 days trading horizon Telkom Indonesia is expected to generate 16.32 times less return on investment than Tesla. In addition to that, Telkom Indonesia is 1.59 times more volatile than Tesla Inc. It trades about 0.01 of its total potential returns per unit of risk. Tesla Inc is currently generating about 0.16 per unit of volatility. If you would invest 16,162 in Tesla Inc on September 3, 2024 and sell it today you would earn a total of 15,988 from holding Tesla Inc or generate 98.92% 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. Tesla Inc
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Tesla Inc |
Telkom Indonesia and Tesla Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Tesla
The main advantage of trading using opposite Telkom Indonesia and Tesla positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Tesla 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 Tesla will offset losses from the drop in Tesla's long position.| Telkom Indonesia vs. SENECA FOODS A | Telkom Indonesia vs. Astral Foods Limited | Telkom Indonesia vs. THAI BEVERAGE | Telkom Indonesia vs. JJ SNACK FOODS |
| Tesla vs. Methode Electronics | Tesla vs. KENNAMETAL INC | Tesla vs. Nucletron Electronic Aktiengesellschaft | Tesla vs. Meiko Electronics Co |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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