Correlation Between Telkom Indonesia and America Movil
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and America Movil 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 America Movil 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 America Movil SAB, you can compare the effects of market volatilities on Telkom Indonesia and America Movil 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 America Movil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and America Movil.
Diversification Opportunities for Telkom Indonesia and America Movil
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Telkom and America is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and America Movil SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on America Movil SAB 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 America Movil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of America Movil SAB has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and America Movil go up and down completely randomly.
Pair Corralation between Telkom Indonesia and America Movil
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to generate 1.48 times more return on investment than America Movil. However, Telkom Indonesia is 1.48 times more volatile than America Movil SAB. It trades about -0.16 of its potential returns per unit of risk. America Movil SAB is currently generating about -0.3 per unit of risk. If you would invest 1,843 in Telkom Indonesia Tbk on August 27, 2024 and sell it today you would lose (135.00) from holding Telkom Indonesia Tbk or give up 7.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. America Movil SAB
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| America Movil SAB |
Telkom Indonesia and America Movil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and America Movil
The main advantage of trading using opposite Telkom Indonesia and America Movil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, America Movil 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 America Movil will offset losses from the drop in America Movil's long position.| Telkom Indonesia vs. Liberty Broadband Srs | Telkom Indonesia vs. Ribbon Communications | Telkom Indonesia vs. Liberty Broadband Srs | Telkom Indonesia vs. Shenandoah Telecommunications Co |
| America Movil vs. Anterix | America Movil vs. Liberty Broadband Corp | America Movil vs. Ooma Inc | America Movil vs. IDT Corporation |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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