Correlation Between Telkom Indonesia and Banner Acquisition
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Banner Acquisition 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 Banner Acquisition 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 Banner Acquisition Corp, you can compare the effects of market volatilities on Telkom Indonesia and Banner Acquisition 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 Banner Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Banner Acquisition.
Diversification Opportunities for Telkom Indonesia and Banner Acquisition
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Telkom and Banner is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Banner Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banner Acquisition Corp 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 Banner Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banner Acquisition Corp has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Banner Acquisition go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Banner Acquisition
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the Banner Acquisition. In addition to that, Telkom Indonesia is 15.57 times more volatile than Banner Acquisition Corp. It trades about -0.04 of its total potential returns per unit of risk. Banner Acquisition Corp is currently generating about 0.22 per unit of volatility. If you would invest 1,012 in Banner Acquisition Corp on September 3, 2024 and sell it today you would earn a total of 17.00 from holding Banner Acquisition Corp or generate 1.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 17.89% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Banner Acquisition Corp
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Banner Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Telkom Indonesia and Banner Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Banner Acquisition
The main advantage of trading using opposite Telkom Indonesia and Banner Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Banner Acquisition 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 Banner Acquisition will offset losses from the drop in Banner Acquisition's long position.| Telkom Indonesia vs. Highway Holdings Limited | Telkom Indonesia vs. QCR Holdings | Telkom Indonesia vs. Partner Communications | Telkom Indonesia vs. Acumen Pharmaceuticals |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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