Correlation Between Telkom Indonesia and Bounce Mobile
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Bounce Mobile 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 Bounce Mobile 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 Bounce Mobile Systems, you can compare the effects of market volatilities on Telkom Indonesia and Bounce Mobile 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 Bounce Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Bounce Mobile.
Diversification Opportunities for Telkom Indonesia and Bounce Mobile
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Telkom and Bounce is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Bounce Mobile Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bounce Mobile Systems 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 Bounce Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bounce Mobile Systems has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Bounce Mobile go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Bounce Mobile
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the Bounce Mobile. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 8.38 times less risky than Bounce Mobile. The stock trades about -0.15 of its potential returns per unit of risk. The Bounce Mobile Systems is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1.77 in Bounce Mobile Systems on November 4, 2024 and sell it today you would lose (0.12) from holding Bounce Mobile Systems or give up 6.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Bounce Mobile Systems
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Bounce Mobile Systems |
Telkom Indonesia and Bounce Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Bounce Mobile
The main advantage of trading using opposite Telkom Indonesia and Bounce Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Bounce Mobile 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 Bounce Mobile will offset losses from the drop in Bounce Mobile'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 |
| Bounce Mobile vs. Limitless Venture | Bounce Mobile vs. Guardian Capital Group | Bounce Mobile vs. Princeton Capital | Bounce Mobile vs. SMC Entertainment |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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