Correlation Between Telkom Indonesia and Chongqing Rural
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Chongqing Rural 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 Chongqing Rural 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 Chongqing Rural Commercial, you can compare the effects of market volatilities on Telkom Indonesia and Chongqing Rural 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 Chongqing Rural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Chongqing Rural.
Diversification Opportunities for Telkom Indonesia and Chongqing Rural
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telkom and Chongqing is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Chongqing Rural Commercial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Rural Comm 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 Chongqing Rural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Rural Comm has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Chongqing Rural go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Chongqing Rural
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the Chongqing Rural. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 5.39 times less risky than Chongqing Rural. The stock trades about -0.19 of its potential returns per unit of risk. The Chongqing Rural Commercial is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,811 in Chongqing Rural Commercial on September 22, 2024 and sell it today you would earn a total of 671.00 from holding Chongqing Rural Commercial or generate 37.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Chongqing Rural Commercial
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Chongqing Rural Comm |
Telkom Indonesia and Chongqing Rural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Chongqing Rural
The main advantage of trading using opposite Telkom Indonesia and Chongqing Rural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Chongqing Rural 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 Chongqing Rural will offset losses from the drop in Chongqing Rural's long position.| Telkom Indonesia vs. T Mobile | Telkom Indonesia vs. Comcast Corp | Telkom Indonesia vs. Charter Communications | Telkom Indonesia vs. Vodafone Group PLC |
| Chongqing Rural vs. Morningstar Unconstrained Allocation | Chongqing Rural vs. Bondbloxx ETF Trust | Chongqing Rural vs. Spring Valley Acquisition | Chongqing Rural vs. Bondbloxx ETF Trust |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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