Correlation Between Telkom Indonesia and Cowen
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Cowen 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 Cowen 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 Cowen Group, you can compare the effects of market volatilities on Telkom Indonesia and Cowen 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 Cowen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Cowen.
Diversification Opportunities for Telkom Indonesia and Cowen
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Telkom and Cowen is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Cowen Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cowen Group 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 Cowen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cowen Group has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Cowen go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Cowen
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the Cowen. In addition to that, Telkom Indonesia is 14.23 times more volatile than Cowen Group. It trades about -0.03 of its total potential returns per unit of risk. Cowen Group is currently generating about 0.28 per unit of volatility. If you would invest 3,844 in Cowen Group on September 3, 2024 and sell it today you would earn a total of 55.00 from holding Cowen Group or generate 1.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 10.91% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Cowen Group
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Cowen Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Telkom Indonesia and Cowen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Cowen
The main advantage of trading using opposite Telkom Indonesia and Cowen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Cowen 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 Cowen will offset losses from the drop in Cowen's long position.| Telkom Indonesia vs. Highway Holdings Limited | Telkom Indonesia vs. QCR Holdings | Telkom Indonesia vs. Partner Communications | Telkom Indonesia vs. Acumen Pharmaceuticals |
| Cowen vs. Ihuman Inc | Cowen vs. Where Food Comes | Cowen vs. Cadence Design Systems | Cowen vs. Zane Interactive Publishing |
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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