Correlation Between Telkom Indonesia and Austal
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Austal 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 Austal 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 Austal Limited, you can compare the effects of market volatilities on Telkom Indonesia and Austal 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 Austal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Austal.
Diversification Opportunities for Telkom Indonesia and Austal
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Telkom and Austal is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Austal Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austal Limited 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 Austal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austal Limited has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Austal go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Austal
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the Austal. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 2.82 times less risky than Austal. The stock trades about -0.19 of its potential returns per unit of risk. The Austal Limited is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 205.00 in Austal Limited on August 29, 2024 and sell it today you would earn a total of 1.00 from holding Austal Limited or generate 0.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Austal Limited
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Austal Limited |
Telkom Indonesia and Austal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Austal
The main advantage of trading using opposite Telkom Indonesia and Austal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Austal 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 Austal will offset losses from the drop in Austal's long position.| Telkom Indonesia vs. Liberty Broadband Srs | Telkom Indonesia vs. Cable One | Telkom Indonesia vs. Liberty Broadband Corp | Telkom Indonesia vs. Liberty Global PLC |
| Austal vs. 808 Renewable Energy | Austal vs. Sky Harbour Group | Austal vs. VirTra Inc | Austal vs. Firan Technology Group |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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