Correlation Between Telkom Indonesia and CLP Holdings
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and CLP 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 CLP 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 CLP Holdings, you can compare the effects of market volatilities on Telkom Indonesia and CLP 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 CLP Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and CLP Holdings.
Diversification Opportunities for Telkom Indonesia and CLP Holdings
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Telkom and CLP is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and CLP Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLP 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 CLP Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CLP Holdings has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and CLP Holdings go up and down completely randomly.
Pair Corralation between Telkom Indonesia and CLP Holdings
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the CLP Holdings. In addition to that, Telkom Indonesia is 2.94 times more volatile than CLP Holdings. It trades about -0.06 of its total potential returns per unit of risk. CLP Holdings is currently generating about 0.0 per unit of volatility. If you would invest 844.00 in CLP Holdings on September 1, 2024 and sell it today you would earn a total of 0.00 from holding CLP Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. CLP Holdings
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| CLP Holdings |
Telkom Indonesia and CLP Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and CLP Holdings
The main advantage of trading using opposite Telkom Indonesia and CLP Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, CLP 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 CLP Holdings will offset losses from the drop in CLP Holdings' long position.| Telkom Indonesia vs. T Mobile | Telkom Indonesia vs. Comcast Corp | Telkom Indonesia vs. Lumen Technologies | Telkom Indonesia vs. Charter Communications |
| CLP Holdings vs. Southern Company | CLP Holdings vs. Duke Energy | CLP Holdings vs. Duke Energy | CLP Holdings vs. National Grid 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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