Correlation Between Telkom Indonesia and Bridgetown Holdings
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Bridgetown Holdings 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 Bridgetown Holdings 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 Bridgetown Holdings, you can compare the effects of market volatilities on Telkom Indonesia and Bridgetown Holdings 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 Bridgetown Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Bridgetown Holdings.
Diversification Opportunities for Telkom Indonesia and Bridgetown Holdings
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Telkom and Bridgetown is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Bridgetown Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgetown Holdings 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 Bridgetown Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridgetown Holdings has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Bridgetown Holdings go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Bridgetown Holdings
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the Bridgetown Holdings. In addition to that, Telkom Indonesia is 11.0 times more volatile than Bridgetown Holdings. It trades about -0.05 of its total potential returns per unit of risk. Bridgetown Holdings is currently generating about 0.17 per unit of volatility. If you would invest 1,002 in Bridgetown Holdings on October 11, 2024 and sell it today you would earn a total of 28.00 from holding Bridgetown Holdings or generate 2.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 25.81% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Bridgetown Holdings
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Bridgetown Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Telkom Indonesia and Bridgetown Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Bridgetown Holdings
The main advantage of trading using opposite Telkom Indonesia and Bridgetown Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Bridgetown Holdings 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 Bridgetown Holdings will offset losses from the drop in Bridgetown Holdings' 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 |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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