Correlation Between Telkom Indonesia and Akero Therapeutics
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Akero Therapeutics 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 Akero Therapeutics 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 Akero Therapeutics, you can compare the effects of market volatilities on Telkom Indonesia and Akero Therapeutics 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 Akero Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Akero Therapeutics.
Diversification Opportunities for Telkom Indonesia and Akero Therapeutics
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Telkom and Akero is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Akero Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akero Therapeutics 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 Akero Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akero Therapeutics has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Akero Therapeutics go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Akero Therapeutics
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the Akero Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 1.79 times less risky than Akero Therapeutics. The stock trades about -0.17 of its potential returns per unit of risk. The Akero Therapeutics is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,173 in Akero Therapeutics on August 30, 2024 and sell it today you would earn a total of 44.00 from holding Akero Therapeutics or generate 1.39% 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. Akero Therapeutics
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Akero Therapeutics |
Telkom Indonesia and Akero Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Akero Therapeutics
The main advantage of trading using opposite Telkom Indonesia and Akero Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Akero Therapeutics 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 Akero Therapeutics will offset losses from the drop in Akero Therapeutics' long position.| Telkom Indonesia vs. T Mobile | Telkom Indonesia vs. Comcast Corp | Telkom Indonesia vs. Verizon Communications | Telkom Indonesia vs. Charter Communications |
| Akero Therapeutics vs. Terns Pharmaceuticals | Akero Therapeutics vs. Madrigal Pharmaceuticals | Akero Therapeutics vs. Inozyme Pharma | Akero Therapeutics vs. Viking Therapeutics |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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