Correlation Between Telkom Indonesia and Aequus Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Aequus Pharmaceuticals 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 Aequus Pharmaceuticals 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 Aequus Pharmaceuticals, you can compare the effects of market volatilities on Telkom Indonesia and Aequus Pharmaceuticals 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 Aequus Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Aequus Pharmaceuticals.
Diversification Opportunities for Telkom Indonesia and Aequus Pharmaceuticals
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Telkom and Aequus is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Aequus Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aequus Pharmaceuticals 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 Aequus Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aequus Pharmaceuticals has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Aequus Pharmaceuticals go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Aequus Pharmaceuticals
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the Aequus Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 6.91 times less risky than Aequus Pharmaceuticals. The stock trades about -0.03 of its potential returns per unit of risk. The Aequus Pharmaceuticals is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2.63 in Aequus Pharmaceuticals on August 26, 2024 and sell it today you would lose (1.97) from holding Aequus Pharmaceuticals or give up 74.9% 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. Aequus Pharmaceuticals
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Aequus Pharmaceuticals |
Telkom Indonesia and Aequus Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Aequus Pharmaceuticals
The main advantage of trading using opposite Telkom Indonesia and Aequus Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Aequus Pharmaceuticals 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 Aequus Pharmaceuticals will offset losses from the drop in Aequus Pharmaceuticals' long position.| Telkom Indonesia vs. Cogent Communications Group | Telkom Indonesia vs. Liberty Broadband Srs | Telkom Indonesia vs. Ribbon Communications | Telkom Indonesia vs. Liberty Broadband Srs |
| Aequus Pharmaceuticals vs. Rezolute | Aequus Pharmaceuticals vs. Tempest Therapeutics | Aequus Pharmaceuticals vs. Forte Biosciences | Aequus Pharmaceuticals vs. Dyadic 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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