Correlation Between Telkom Indonesia and Apple
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Apple 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 Apple 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 Apple Inc, you can compare the effects of market volatilities on Telkom Indonesia and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Apple.
Diversification Opportunities for Telkom Indonesia and Apple
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telkom and Apple is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Apple go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Apple
Assuming the 90 days trading horizon Telkom Indonesia Tbk is expected to under-perform the Apple. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 1.1 times less risky than Apple. The stock trades about -0.22 of its potential returns per unit of risk. The Apple Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 21,599 in Apple Inc on August 27, 2024 and sell it today you would earn a total of 341.00 from holding Apple Inc or generate 1.58% 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. Apple Inc
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Apple Inc |
Telkom Indonesia and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Apple
The main advantage of trading using opposite Telkom Indonesia and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| Telkom Indonesia vs. Apple Inc | Telkom Indonesia vs. Apple Inc | Telkom Indonesia vs. Apple Inc | Telkom Indonesia vs. Microsoft |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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