Correlation Between Telkom Indonesia and Dream Industrial
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Dream Industrial 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 Dream Industrial 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 Dream Industrial Real, you can compare the effects of market volatilities on Telkom Indonesia and Dream Industrial 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 Dream Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Dream Industrial.
Diversification Opportunities for Telkom Indonesia and Dream Industrial
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Telkom and Dream is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Dream Industrial Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dream Industrial Real 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 Dream Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dream Industrial Real has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Dream Industrial go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Dream Industrial
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to generate 1.49 times more return on investment than Dream Industrial. However, Telkom Indonesia is 1.49 times more volatile than Dream Industrial Real. It trades about -0.19 of its potential returns per unit of risk. Dream Industrial Real is currently generating about -0.4 per unit of risk. If you would invest 1,695 in Telkom Indonesia Tbk on September 22, 2024 and sell it today you would lose (142.00) from holding Telkom Indonesia Tbk or give up 8.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Dream Industrial Real
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Dream Industrial Real |
Telkom Indonesia and Dream Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Dream Industrial
The main advantage of trading using opposite Telkom Indonesia and Dream Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Dream Industrial 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 Dream Industrial will offset losses from the drop in Dream Industrial's long position.| Telkom Indonesia vs. T Mobile | Telkom Indonesia vs. Comcast Corp | Telkom Indonesia vs. Charter Communications | Telkom Indonesia vs. Vodafone Group PLC |
| Dream Industrial vs. Ashford Hospitality Trust | Dream Industrial vs. Ashford Hospitality Trust | Dream Industrial vs. Braemar Hotels Resorts | Dream Industrial vs. Braemar Hotels Resorts |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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