Correlation Between Telkom Indonesia and Algoma Central
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Algoma Central 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 Algoma Central 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 Algoma Central, you can compare the effects of market volatilities on Telkom Indonesia and Algoma Central 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 Algoma Central. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Algoma Central.
Diversification Opportunities for Telkom Indonesia and Algoma Central
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telkom and Algoma is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Algoma Central in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Algoma Central 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 Algoma Central. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Algoma Central has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Algoma Central go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Algoma Central
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the Algoma Central. In addition to that, Telkom Indonesia is 1.66 times more volatile than Algoma Central. It trades about -0.03 of its total potential returns per unit of risk. Algoma Central is currently generating about 0.05 per unit of volatility. If you would invest 1,030 in Algoma Central on September 3, 2024 and sell it today you would earn a total of 60.00 from holding Algoma Central or generate 5.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Algoma Central
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Algoma Central |
Telkom Indonesia and Algoma Central Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Algoma Central
The main advantage of trading using opposite Telkom Indonesia and Algoma Central positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Algoma Central 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 Algoma Central will offset losses from the drop in Algoma Central's long position.| Telkom Indonesia vs. Highway Holdings Limited | Telkom Indonesia vs. QCR Holdings | Telkom Indonesia vs. Partner Communications | Telkom Indonesia vs. Acumen Pharmaceuticals |
| Algoma Central vs. TOMI Environmental Solutions | Algoma Central vs. SCOR PK | Algoma Central vs. HUMANA INC | Algoma Central vs. Aquagold International |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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