Correlation Between Telkom Indonesia and Peninsula Energy
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Peninsula Energy 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 Peninsula Energy 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 Peninsula Energy Limited, you can compare the effects of market volatilities on Telkom Indonesia and Peninsula Energy 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 Peninsula Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Peninsula Energy.
Diversification Opportunities for Telkom Indonesia and Peninsula Energy
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Telkom and Peninsula is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Peninsula Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peninsula Energy 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 Peninsula Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peninsula Energy has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Peninsula Energy go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Peninsula Energy
Assuming the 90 days trading horizon Telkom Indonesia Tbk is expected to under-perform the Peninsula Energy. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 5.52 times less risky than Peninsula Energy. The stock trades about -0.22 of its potential returns per unit of risk. The Peninsula Energy Limited is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 85.00 in Peninsula Energy Limited on November 7, 2024 and sell it today you would lose (4.00) from holding Peninsula Energy Limited or give up 4.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 86.96% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Peninsula Energy Limited
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Peninsula Energy |
Telkom Indonesia and Peninsula Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Peninsula Energy
The main advantage of trading using opposite Telkom Indonesia and Peninsula Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Peninsula Energy 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 Peninsula Energy will offset losses from the drop in Peninsula Energy's long position.| Telkom Indonesia vs. MEDICAL FACILITIES NEW | Telkom Indonesia vs. CVR Medical Corp | Telkom Indonesia vs. CN DATANG C | Telkom Indonesia vs. MeVis Medical Solutions |
| Peninsula Energy vs. BHP Group Limited | Peninsula Energy vs. Rio Tinto Group | Peninsula Energy vs. Vale SA | Peninsula Energy vs. Vale SA |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |