Correlation Between Telkom Indonesia and GFL ENVIRONM
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and GFL ENVIRONM 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 GFL ENVIRONM 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 GFL ENVIRONM, you can compare the effects of market volatilities on Telkom Indonesia and GFL ENVIRONM 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 GFL ENVIRONM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and GFL ENVIRONM.
Diversification Opportunities for Telkom Indonesia and GFL ENVIRONM
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Telkom and GFL is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and GFL ENVIRONM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GFL ENVIRONM 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 GFL ENVIRONM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GFL ENVIRONM has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and GFL ENVIRONM go up and down completely randomly.
Pair Corralation between Telkom Indonesia and GFL ENVIRONM
Assuming the 90 days trading horizon Telkom Indonesia Tbk is expected to under-perform the GFL ENVIRONM. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 1.22 times less risky than GFL ENVIRONM. The stock trades about -0.22 of its potential returns per unit of risk. The GFL ENVIRONM is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 4,279 in GFL ENVIRONM on November 2, 2024 and sell it today you would lose (139.00) from holding GFL ENVIRONM or give up 3.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. GFL ENVIRONM
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| GFL ENVIRONM |
Telkom Indonesia and GFL ENVIRONM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and GFL ENVIRONM
The main advantage of trading using opposite Telkom Indonesia and GFL ENVIRONM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, GFL ENVIRONM 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 GFL ENVIRONM will offset losses from the drop in GFL ENVIRONM's long position.| Telkom Indonesia vs. SILICON LABORATOR | Telkom Indonesia vs. KINGBOARD CHEMICAL | Telkom Indonesia vs. Shin Etsu Chemical Co | Telkom Indonesia vs. Silicon Motion Technology |
| GFL ENVIRONM vs. SINGAPORE AIRLINES | GFL ENVIRONM vs. American Airlines Group | GFL ENVIRONM vs. GALENA MINING LTD | GFL ENVIRONM vs. Perseus Mining Limited |
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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