Correlation Between Telkom Indonesia and Fuse Science
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Fuse Science 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 Fuse Science 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 Fuse Science, you can compare the effects of market volatilities on Telkom Indonesia and Fuse Science 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 Fuse Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Fuse Science.
Diversification Opportunities for Telkom Indonesia and Fuse Science
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Telkom and Fuse is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Fuse Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuse Science 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 Fuse Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuse Science has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Fuse Science go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Fuse Science
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the Fuse Science. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 10.13 times less risky than Fuse Science. The stock trades about -0.07 of its potential returns per unit of risk. The Fuse Science is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1.08 in Fuse Science on January 7, 2025 and sell it today you would lose (0.77) from holding Fuse Science or give up 71.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.3% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Fuse Science
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Fuse Science |
Telkom Indonesia and Fuse Science Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Fuse Science
The main advantage of trading using opposite Telkom Indonesia and Fuse Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Fuse Science 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 Fuse Science will offset losses from the drop in Fuse Science's long position.| Telkom Indonesia vs. T Mobile | Telkom Indonesia vs. Lumen Technologies | Telkom Indonesia vs. Comcast Corp | Telkom Indonesia vs. Charter Communications |
| Fuse Science vs. CAVU Resources | Fuse Science vs. Epazz Inc | Fuse Science vs. Pervasip Corp | Fuse Science vs. Grillit |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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