Correlation Between Tianjin Capital and Telkom Indonesia
Can any of the company-specific risk be diversified away by investing in both Tianjin Capital and Telkom Indonesia 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 Tianjin Capital and Telkom Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tianjin Capital Environmental and Telkom Indonesia Tbk, you can compare the effects of market volatilities on Tianjin Capital and Telkom Indonesia 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 Tianjin Capital with a short position of Telkom Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Capital and Telkom Indonesia.
Diversification Opportunities for Tianjin Capital and Telkom Indonesia
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tianjin and Telkom is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Capital Environmental and Telkom Indonesia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telkom Indonesia Tbk and Tianjin Capital 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 Tianjin Capital Environmental are associated (or correlated) with Telkom Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telkom Indonesia Tbk has no effect on the direction of Tianjin Capital i.e., Tianjin Capital and Telkom Indonesia go up and down completely randomly.
Pair Corralation between Tianjin Capital and Telkom Indonesia
Assuming the 90 days horizon Tianjin Capital is expected to generate 3.56 times less return on investment than Telkom Indonesia. But when comparing it to its historical volatility, Tianjin Capital Environmental is 2.79 times less risky than Telkom Indonesia. It trades about 0.03 of its potential returns per unit of risk. Telkom Indonesia Tbk is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Telkom Indonesia Tbk on October 13, 2024 and sell it today you would earn a total of 0.00 from holding Telkom Indonesia Tbk or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tianjin Capital Environmental vs. Telkom Indonesia Tbk
Performance |
| Timeline |
| Tianjin Capital Envi |
| Telkom Indonesia Tbk |
Tianjin Capital and Telkom Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Capital and Telkom Indonesia
The main advantage of trading using opposite Tianjin Capital and Telkom Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Capital position performs unexpectedly, Telkom Indonesia 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 Telkom Indonesia will offset losses from the drop in Telkom Indonesia's long position.| Tianjin Capital vs. ALTAIR RES INC | Tianjin Capital vs. Altair Engineering | Tianjin Capital vs. SUN LIFE FINANCIAL | Tianjin Capital vs. SYSTEMAIR AB |
| Telkom Indonesia vs. The Japan Steel | Telkom Indonesia vs. STEEL DYNAMICS | Telkom Indonesia vs. Tianjin Capital Environmental | Telkom Indonesia vs. Sch Environnement 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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