Correlation Between Telkom Indonesia and ATAI Life
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and ATAI Life 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 ATAI Life 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 ATAI Life Sciences, you can compare the effects of market volatilities on Telkom Indonesia and ATAI Life 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 ATAI Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and ATAI Life.
Diversification Opportunities for Telkom Indonesia and ATAI Life
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telkom and ATAI is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and ATAI Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATAI Life Sciences 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 ATAI Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATAI Life Sciences has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and ATAI Life go up and down completely randomly.
Pair Corralation between Telkom Indonesia and ATAI Life
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the ATAI Life. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 3.41 times less risky than ATAI Life. The stock trades about -0.19 of its potential returns per unit of risk. The ATAI Life Sciences is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 122.00 in ATAI Life Sciences on August 29, 2024 and sell it today you would earn a total of 47.00 from holding ATAI Life Sciences or generate 38.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. ATAI Life Sciences
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| ATAI Life Sciences |
Telkom Indonesia and ATAI Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and ATAI Life
The main advantage of trading using opposite Telkom Indonesia and ATAI Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, ATAI Life 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 ATAI Life will offset losses from the drop in ATAI Life'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 |
| ATAI Life vs. Mind Medicine | ATAI Life vs. Seelos Therapeutics | ATAI Life vs. GH Research PLC | ATAI Life vs. Cybin Inc |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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