Correlation Between Telkom Indonesia and Croghan Bancshares
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Croghan Bancshares 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 Croghan Bancshares 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 Croghan Bancshares, you can compare the effects of market volatilities on Telkom Indonesia and Croghan Bancshares 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 Croghan Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Croghan Bancshares.
Diversification Opportunities for Telkom Indonesia and Croghan Bancshares
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Telkom and Croghan is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Croghan Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Croghan Bancshares 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 Croghan Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Croghan Bancshares has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Croghan Bancshares go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Croghan Bancshares
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the Croghan Bancshares. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 2.54 times less risky than Croghan Bancshares. The stock trades about -0.03 of its potential returns per unit of risk. The Croghan Bancshares is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 5,800 in Croghan Bancshares on September 2, 2024 and sell it today you would lose (810.00) from holding Croghan Bancshares or give up 13.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 84.48% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Croghan Bancshares
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Croghan Bancshares |
Telkom Indonesia and Croghan Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Croghan Bancshares
The main advantage of trading using opposite Telkom Indonesia and Croghan Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Croghan Bancshares 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 Croghan Bancshares will offset losses from the drop in Croghan Bancshares' long position.| Telkom Indonesia vs. T Mobile | Telkom Indonesia vs. Comcast Corp | Telkom Indonesia vs. Lumen Technologies | Telkom Indonesia vs. Charter Communications |
| Croghan Bancshares vs. HUMANA INC | Croghan Bancshares vs. SCOR PK | Croghan Bancshares vs. Aquagold International | Croghan Bancshares vs. Thrivent High Yield |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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