Correlation Between Telkom Indonesia and Cable One
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Cable One 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 Cable One 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 Cable One, you can compare the effects of market volatilities on Telkom Indonesia and Cable One 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 Cable One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Cable One.
Diversification Opportunities for Telkom Indonesia and Cable One
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Telkom and Cable is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Cable One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cable One 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 Cable One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cable One has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Cable One go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Cable One
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the Cable One. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 1.86 times less risky than Cable One. The stock trades about -0.08 of its potential returns per unit of risk. The Cable One is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 52,001 in Cable One on August 26, 2024 and sell it today you would lose (10,346) from holding Cable One or give up 19.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Cable One
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Cable One |
Telkom Indonesia and Cable One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Cable One
The main advantage of trading using opposite Telkom Indonesia and Cable One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Cable One 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 Cable One will offset losses from the drop in Cable One'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 |
| Cable One vs. Liberty Global PLC | Cable One vs. Liberty Global PLC | Cable One vs. Liberty Broadband Srs | Cable One vs. Shenandoah Telecommunications Co |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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