Correlation Between Telkom Indonesia and DBS Group
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and DBS Group 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 DBS Group 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 DBS Group Holdings, you can compare the effects of market volatilities on Telkom Indonesia and DBS Group 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 DBS Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and DBS Group.
Diversification Opportunities for Telkom Indonesia and DBS Group
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Telkom and DBS is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and DBS Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBS Group 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 DBS Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBS Group Holdings has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and DBS Group go up and down completely randomly.
Pair Corralation between Telkom Indonesia and DBS Group
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the DBS Group. In addition to that, Telkom Indonesia is 1.37 times more volatile than DBS Group Holdings. It trades about -0.1 of its total potential returns per unit of risk. DBS Group Holdings is currently generating about 0.18 per unit of volatility. If you would invest 8,514 in DBS Group Holdings on August 27, 2024 and sell it today you would earn a total of 3,983 from holding DBS Group Holdings or generate 46.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. DBS Group Holdings
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| DBS Group Holdings |
Telkom Indonesia and DBS Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and DBS Group
The main advantage of trading using opposite Telkom Indonesia and DBS Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, DBS Group 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 DBS Group will offset losses from the drop in DBS Group's long position.| Telkom Indonesia vs. Liberty Broadband Srs | Telkom Indonesia vs. Ribbon Communications | Telkom Indonesia vs. Liberty Broadband Srs | Telkom Indonesia vs. Shenandoah Telecommunications Co |
| DBS Group vs. KBC Groep NV | DBS Group vs. United Overseas Bank | DBS Group vs. Embassy Bancorp | DBS Group vs. Overseas Chinese Banking |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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