Correlation Between Telkom Indonesia and John Bean
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and John Bean 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 John Bean 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 John Bean Technologies, you can compare the effects of market volatilities on Telkom Indonesia and John Bean 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 John Bean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and John Bean.
Diversification Opportunities for Telkom Indonesia and John Bean
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Telkom and John is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and John Bean Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Bean Technologies 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 John Bean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Bean Technologies has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and John Bean go up and down completely randomly.
Pair Corralation between Telkom Indonesia and John Bean
Assuming the 90 days trading horizon Telkom Indonesia Tbk is expected to under-perform the John Bean. In addition to that, Telkom Indonesia is 1.88 times more volatile than John Bean Technologies. It trades about -0.01 of its total potential returns per unit of risk. John Bean Technologies is currently generating about 0.02 per unit of volatility. If you would invest 10,939 in John Bean Technologies on September 2, 2024 and sell it today you would earn a total of 761.00 from holding John Bean Technologies or generate 6.96% 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. John Bean Technologies
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| John Bean Technologies |
Telkom Indonesia and John Bean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and John Bean
The main advantage of trading using opposite Telkom Indonesia and John Bean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, John Bean 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 John Bean will offset losses from the drop in John Bean's long position.| Telkom Indonesia vs. Soken Chemical Engineering | Telkom Indonesia vs. KINGBOARD CHEMICAL | Telkom Indonesia vs. Eastman Chemical | Telkom Indonesia vs. Chesapeake Utilities |
| John Bean vs. SINGAPORE AIRLINES | John Bean vs. YATRA ONLINE DL 0001 | John Bean vs. Southwest Airlines Co | John Bean vs. PACIFIC ONLINE |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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