Correlation Between Telkom Indonesia and Altamira Therapeutics

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Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Altamira Therapeutics 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 Altamira Therapeutics 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 Altamira Therapeutics, you can compare the effects of market volatilities on Telkom Indonesia and Altamira Therapeutics 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 Altamira Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Altamira Therapeutics.

Diversification Opportunities for Telkom Indonesia and Altamira Therapeutics

0.7
  Correlation Coefficient

Poor diversification

The 3 months correlation between Telkom and Altamira is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Altamira Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altamira Therapeutics 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 Altamira Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altamira Therapeutics has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Altamira Therapeutics go up and down completely randomly.

Pair Corralation between Telkom Indonesia and Altamira Therapeutics

Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to generate 0.45 times more return on investment than Altamira Therapeutics. However, Telkom Indonesia Tbk is 2.2 times less risky than Altamira Therapeutics. It trades about -0.15 of its potential returns per unit of risk. Altamira Therapeutics is currently generating about -0.11 per unit of risk. If you would invest  1,843  in Telkom Indonesia Tbk on August 27, 2024 and sell it today you would lose (126.00) from holding Telkom Indonesia Tbk or give up 6.84% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Telkom Indonesia Tbk  vs.  Altamira Therapeutics

 Performance 
       Timeline  
Telkom Indonesia Tbk 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Telkom Indonesia Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's essential indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.
Altamira Therapeutics 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Altamira Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Telkom Indonesia and Altamira Therapeutics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Telkom Indonesia and Altamira Therapeutics

The main advantage of trading using opposite Telkom Indonesia and Altamira Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Altamira Therapeutics 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 Altamira Therapeutics will offset losses from the drop in Altamira Therapeutics' long position.
The idea behind Telkom Indonesia Tbk and Altamira Therapeutics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

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